Question
A portfolio is invested 40 percent in stock A, 40 percent in stock B, and 20 percent in US government T-bills that yield 2%. The
A portfolio is invested 40 percent in stock A, 40 percent in stock B, and 20 percent in US government T-bills that yield 2%. The Betas for these stocks are 0.6 for A and 1.4 for B, respectively. The Risk-free rate is 2%, and the market risk premium is 6%. What is the portfolios expected return?
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Foundations Of Finance
Authors: Arthur J. Keown, John H. Martin, J. William Petty
10th Edition
0135160618, 978-0135160619
