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Portfolio Belleville has two stocks: Asset $ Invested Exp. Return ER i i Fran $35,000 14.0% 1.3 Fred $65,000 11.0% 0.9 Market: Risk free: R

Portfolio Belleville has two stocks:

Asset

$ Invested

Exp. Return ERi

i

Fran

$35,000

14.0%

1.3

Fred

$65,000

11.0%

0.9

Market:

Risk free: Rf = 4.0%

Market Return RM = 11.0%

RRi = Rf + i x (RM Rf)

ERp = WA x ERA + WB x ERB +.

RRp = WA x RRA + WB x RRB +.

p = WA x A + WB x B +.

Question: What is the Expected Return ERP of Belleville portfolio?

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