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An Investors portfolio consists of the following stocks Stock Percentage of portfolio Beta Expected Return 1 30 0.95 21% 2 20 1.20 25% 3 5
An Investors portfolio consists of the following stocks
Stock | Percentage of portfolio | Beta | Expected Return |
1 | 30 | 0.95 | 21% |
2 | 20 | 1.20 | 25% |
3 | 5 | 1.50 | 30% |
4 | 15 | 0.80 | 15% |
5 | 18 | 1.60 | 10% |
6 | 12 | 1.90 | 20% |
The current risk-free rate of return is 8.7% and the expected return on the market portfolio is 18%
Compute the
Expected return on the portfolio
Portfolio Beta
Required rate of return for Stock 1 and 4
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