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Peter is considering investing R100 000 in the following 2 shares: Share B (Beta) % Invested Required Return 9% 11% Market Risk Premium 6% 6%
Peter is considering investing R100 000 in the following 2 shares: Share B (Beta) % Invested Required Return 9% 11% Market Risk Premium 6% 6% A B 0.8 1.1 30% 70% The risk-free rate is 7%. Required: 1.1 Use the CAPM and find the market return. (2) 1.2 Use the CAPM and find the required return for the portfolio. (2) 1.3 Calculate the portfolio's beta. (1) 1.4 Graphically illustrate the individual security market lines for shares A and B
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