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Mubita is contemplating on investing in stock A and B with the following probability distribution of possible returns. probability.(Pi). stock.A( %). stockB(%) 0.1. 15. 20

Mubita is contemplating on investing in stock A and B with the following probability distribution of possible returns. probability.(Pi). stock.A( %). stockB(%) 0.1. 15. 20 0.2. 0. 10 0.4. 5. 20 0.2 10 30 0.1. 25 50 calculate the expected rate of each stock. Assuming the capital assets pricing model (CCAPM) holds stock B' s Beta is greater than stock A' s Beta by 0.27. what is the excess return on the market portfolio ?

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