Question
The market portfolio is currently generating a rate of return of 15%. You are analyzing portfolio XYZ for which you've measured the required return to
The market portfolio is currently generating a rate of return of 15%. You are analyzing portfolio XYZ for which you've measured the required return to be 12%. Based on this information, which one of the following must be true?
The risk free rate of return must be 3%.
The beta of the market portfolio must be 3.0
The beta of portfolio XYZ must be less than 1.0
Portfolio XYZ is highly affected by swings in the market.
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Valuation Measuring and managing the values of companies
Authors: Mckinsey, Tim Koller, Marc Goedhart, David Wessel
5th edition
978-0470424650, 9780470889930, 470424656, 470889934, 978-047042470
