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What is the expected return for the entire stock portfolio: (HINT: this is a three-step problem that involves calculating the risk premium first, then the
What is the expected return for the entire stock portfolio: (HINT: this is a three-step problem that involves calculating the risk premium first, then the weight of each stock in the portfolio, and plugging the two into the expected return formula)
Details of the Brokerage Account Stock Shares Beta Std. Dev Div Yield Avg. Return Cost FMV Mega co 1000 .88 12.5% 4.0% 12.5% 8,046.47 14,500 Tiny co 1000 1.24 18% 0 15% 10,724.35 12,333 Oilco 1000 1.00 10% 3.5% 8% 11,135.70 15,150 Auto co 1000 1.12 10% 3.0% 10% 12,124.72 16,138 TOTAL 58,121 Details of the Brokerage Account Stock Shares Beta Std. Dev Div Yield Avg. Return Cost FMV Mega co 1000 .88 12.5% 4.0% 12.5% 8,046.47 14,500 Tiny co 1000 1.24 18% 0 15% 10,724.35 12,333 Oilco 1000 1.00 10% 3.5% 8% 11,135.70 15,150 Auto co 1000 1.12 10% 3.0% 10% 12,124.72 16,138 TOTAL 58,121Step by Step Solution
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