Question
Consider the following three individuals portfolios consisting of investments in four stocks: Stock Beta Jack's Investment John's Investment Michael's Investment A 1.3 2500 5000 10000
Consider the following three individuals portfolios consisting of investments in four stocks:
| Stock | Beta | Jack's Investment | John's Investment | Michael's Investment |
|---|---|---|---|---|
| A | 1.3 | 2500 | 5000 | 10000 |
| B | 1.0 | 2500 | 5000 | 10000 |
| C | 0.8 | 2500 | 5000 | -5000 |
| D | -0.5 | 2500 | -5000 | -5000 |
Assuming that the risk-free rate is 4%, and the expected return on the market is 12%. The required return of John's portfolio is closest to:
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
6th International Edition
0071229035, 978-0071229036
