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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) What is the Portfolio Beta?
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% Tiny co 1000 1.24 18% 0 8,046.4714,500 15% 10,724.35 12,333 Oil co 1000 1.00 1096 3.5% 8% 1,135.70 15,150 Auto co 1000 1.12 10% 3.0% 10% 12,124.72 16,138 TOTAL 58,121 Note: The stock portfolio has a correlation coefficient with the market of .80
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