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Question 13 (2.5 points) Assume that you currently hold a well-diversified portfolio that has an required return of 10.0% and a beta of 1.20.
Question 13 (2.5 points) Assume that you currently hold a well-diversified portfolio that has an required return of 10.0% and a beta of 1.20. You are in the process of buying 100 shares of ATT Corp at $10 a share and adding it to your portfolio. ATT has an required return of 15.0% and a beta of 1.50. The total value of your current portfolio is $9,000. What will the expected return and beta on the portfolio be after the purchase of the ATT stock? rp bp 14.70%; 1.92 10.50%; 1.28 10.50%; 1.23 14.50%; 1.92 14.50%; 1.47 12.30%; 1.28 Question 14 (2.5 points) Stock X, Stock Y, and the market have had the following returns over the past four years. Year Market X Y 1 10% 12% 8% 2 9 6 3 3 14 10 12 4 5 4 -2 The risk-free rate is 5 percent. The market risk premium is 8 percent. What is the required rate of return for a portfolio which consists of $10,000 invested in Stock X and $15,000 invested in Stock Y? 11.58% 13.62% 8.75% 8.23% 15.01%
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