Question
Use the following setup for questions 5-6. You construct a portfolio out of 4 assets. The betas of the assets are 1, 0.5, 1.9, and
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Use the following setup for questions 5-6. You construct a portfolio out of 4 assets. The betas of the assets are 1, 0.5, 1.9, and 0.9, and the respective weights of the assets in your portfolio are 20%, 15%, 35%, and 30%.
What is the beta of your portfolio? (please round to 2 decimal places)
QUESTION 6
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If the expected market return the next year is 9% and the risk-free rate is 4%, what is the expected return of your portfolio as calculated by CAPM? (please round to 1 decimal place )
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
