Question
a. Your investment portfolio contains 200 shares of Dollarama and 450 shares of Dollar Tree. The price of Dollarma is currently $92 per share, and
a. Your investment portfolio contains 200 shares of Dollarama and 450 shares of Dollar Tree. The price of Dollarma is currently $92 per share, and the price of Dollar Tree is currently $11 per share. If you expect the return on Dollarama to be 6% in the next year, and the return on Dollar Tree to be 8%, what is the expected return for your portfolio?
b. Henry's stock has a beta of 0.9, while Sandyshore stock has a beta of 1.35. If the risk-free rate is 2%, and the market risk premium is 8%, what is the expected return on a portfolio with equal holdings of Henry's and Sandyshore?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started