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Consider a portfolio with the following equity positions: Asset Investment Beta Liquefied Natural Gas Limited (LNG) $26,000 1.7 Greencross Limited (GXL) $28,000 1.3 Brambles Limited
Consider a portfolio with the following equity positions: Asset Investment Beta Liquefied Natural Gas Limited (LNG) $26,000 1.7 Greencross Limited (GXL) $28,000 1.3 Brambles Limited (BXB) $34,000 0.8 Macquarie Group Limited (MQG) $40,000 1.2 Telstra Corporation Limited (TLS) $32,000 0.9 The portfolio also has $40,000 invested in 10-year Australian government bonds with a yield-to-maturity of 2.75% p.a. The current market risk premium is 7% p.a. (a) What is the expected return on the market portfolio? (b) What is the beta of the portfolio described above
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