Question
Linda plans to invest in a portfolio which comprises an equity (risky) fund and a T-bill money market fund. The equity fund invested 60% in
Linda plans to invest in a portfolio which comprises an equity (risky) fund and a T-bill money market fund. The equity fund invested 60% in stock A and 40% in stock B. The expected return of stock A is 26%. The expected return of stock B is 12%. The variance of the equity fund is 8.41%. T-bill rate is 3%. What is the slope of the CAL?
| A. | 2.4 | |
| B. | 0.7 | |
| C. | 2.1 | |
| D. | 0.6 |
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Fundamentals Of Corporate Finance
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
5th Edition
1119795435, 978-1119795438
