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Please provide the equation used in the cells. Market risk premium (RPM) = Risk-free rate 5.000% 6.040% Expected return on market = + Risk-free rate
Please provide the equation used in the cells.
Market risk premium (RPM) = Risk-free rate 5.000% 6.040% Expected return on market = + Risk-free rate 6.040% 11.040% Market risk premium 5.000% = + = Required return = Goodman: Required return = 13.728% = Landry: Required return = 3.240% f. If you formed a portfolio that consisted of 50% Goodman stock and 50% Landry stock, what would be its beta and its required return? The beta of a portfolio is simply a weighted average of the betas of the stocks in the portfolio, so this portfolio's beta would be: Portfolio beta = g. Suppose an investor wants to include Goodman Industries' stock in his or her portfolio. Stocks A, B, and C are currently in the portfolio, and their betas are 0.769, 0.985, and 1.423, respectively. Calculate the new portfolio's required return if it consists of 25% of Goodman, 15% of Stock A, 40% of Stock B, and 20% of Stock C. Beta Goodman Stock A Stock B Stock C 0.769 0.985 1.423 Portfolio Weight 25% 15% 40% 20% 100% Portfolio Beta = Required return on portfolio: = Risk-free rate + Market Risk Premium Beta = =Step by Step Solution
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