Question
1. Suppose you form a portfolio consisting of $27,000 invested in a mutual fund with beta of 1.5, $29,000 invested in Treasury securities (assume risk-free),
1. Suppose you form a portfolio consisting of $27,000 invested in a mutual fund with beta of 1.5, $29,000 invested in Treasury securities (assume risk-free), and $13,000 invested in an index fund tracking the market. Expected market risk premium is 6.7%. Risk-free rate is 0.8%. What is the expected return of this portfolio according to the CAPM? Answer in percent, rounded to one decimal place.
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National Finance A Chinese Perspective
Authors: Yunxian Chen, Heming Yong
1st Edition
9813360917, 978-9813360914
