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5. It's found that due to inflation in US economy most investors are risk averse and are seeking investment portfolio which will have a
5. It's found that due to inflation in US economy most investors are risk averse and are seeking investment portfolio which will have a Beta close to market beta (i.e., Beta =1). In a 5-asset portfolio they have found 3 assets have beta over 1.5 with an average of 1.55. The overall market return is 12.3% dropped from 14.7%. The risk-free rate also dropped from 4.5% to 3.2%. Under such circumstances assets with what beta values should be included in a portfolio, so the return of portfolio will be minimum (beta of portfolio should be 1) but the portfolio beta will also be minimum?
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