Question
The beta of Sharrock Companies is 0.8, and the beta of Schoenberger Corporation is 1.4.The 10-year risk-free rate is 3% and the expected market risk
The beta of Sharrock Companies is 0.8, and the beta of Schoenberger Corporation is 1.4.The 10-year risk-free rate is 3% and the expected market risk premium is 7%.
a.What is the beta of a portfolio made up of 40% Sharrock Companies and 60% Schoenberger?
b.What is the required return of this portfolio?
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Fundamentals of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
6th Canadian edition
1259024962, 978-1259024962
