Question
The expected return of the current portfolio is 10%. A new project is being considered that would be added to the existing portfolio if accepted.
The expected return of the current portfolio is 10%. A new project is being considered that would be added to the existing portfolio if accepted. The new project would comprise 40% of the entire new portfolio. The expected return of the new project is 11%. Calculate the expected return of the combined new portfolio.
a.10%
b.10.4%
c.10.8%
d.11%
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Financial Management Principles and Applications
Authors: Sheridan Titman, Arthur J. Keown, John H. Martin
13th edition
134417216, 978-0134417509, 013441750X, 978-0134417219
