Question
#12 An investor has $10,000 to invest in 5 different stocks. Information regarding the 5 stocks is shown in the table below: Stock Expected Return
#12
An investor has $10,000 to invest in 5 different stocks. Information regarding the 5 stocks is shown in the table below:
| Stock | Expected Return | Beta | Amount Invested |
|---|---|---|---|
| A | 9.00% | 1.00 | $1,625.00 |
| B | 10.00% | 1.20 | $2,679.00 |
| C | 6.50% | 0.70 | $2,710.00 |
| D | 8.00% | 0.90 | $897.00 |
| E | 12.00% | 1.40 | $2,089.00 |
Also, the risk free rate for the economy is currently 3.00%.
What is the beta for this portfolio?
Given the above information, what is the market risk premium for investors (assuming the expected portfolio return is equal to the required portfolio return)?
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Local Public Finance
Authors: René Geissler, Gerhard Hammerschmid, Christian Raffer
1st Edition
3030674681, 978-3030674687
