Question
Consider a portfolio consisting of 2 assets, a share with a beta of 1.02 and market risk premium of 12%, and a risk-free asset with
Consider a portfolio consisting of 2 assets, a share with a beta of 1.02 and market risk premium of 12%, and a risk-free asset with an expected return of 3%. If the portfolio weighting is 65% of shares and 35% of the risk-free asset, what is the expected return on the portfolio?
A. 10.96%
B. 16.18%
C. 8.97%
D. 9.4%
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
13th edition
1285198840, 978-1285198842
