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Question in Finance Econ 6) Let's use the information from question 5) but with the stock Beta's added. Standard Asset Amount Invested Expected Return Deviation

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Question in Finance Econ

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6) Let's use the information from question 5) but with the stock Beta's added. Standard Asset Amount Invested Expected Return Deviation Beta Test Inc. $1000 10.00% 20.00% 0.7 Quiz Corp. $6000 15.00% 30.00% 1.5 Risk-Free -$ 1000 1.00% 0.00% 0 Calculate the estimated Beta of the portfolio. If the market return is 12%, using CAPM, is this portfolio under or over-valued by the market? Does the portfolio have an alpha? If so what is it? Let's look at the individual stocks in the portfolio. Using CAPM, are Test Inc. and Quiz Corp. over or under-valued by the market? If a stock has a positive alpha does that always mean it is under-valued by the market based on CAPM? Briey explain

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