Question
Expected return of a portfolio using beta . The beta of four stockslong dashP, Q, R, and Slong dashare 0.60, 0.85, 1.20, and 1.35, respectively
Expected return of a portfolio using
beta.
The beta of four
stockslong dashP,
Q, R, and
Slong dashare
0.60,
0.85,
1.20,
and
1.35,
respectively and the beta of portfolio 1 is
1.00,
the beta of portfolio 2 is
0.90,
and the beta of portfolio 3 is
1.12.
What are the expected returns of each of the four individual assets and the three portfolios if the current SML is plotted with an intercept of
3.0%
(risk-free rate) and a market premium of
11.0%
(slope of the line)?
What is the expected return of stock P?
nothing%
(Round to two decimal places.)
What is the expected return of stock Q?
nothing%
(Round to two decimal places.)
What is the expected return of stock R?
nothing%
(Round to two decimal places.)
What is the expected return of stock S?
nothing%
(Round to two decimal places.)
What is the expected return of portfolio 1?
nothing%
(Round to two decimal places.)
What is the expected return of portfolio 2?
nothing%
(Round to two decimal places.)
What is the expected return of portfolio 3?
nothing%
(Round to two decimal places.)
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