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You are given the following information on three stocks: Stock A: Beta = 1.00 Stock B: Beta = 1.25 Stock C: Beta = 0.75 You
You are given the following information on three stocks: Stock A: Beta = 1.00 Stock B: Beta = 1.25 Stock C: Beta = 0.75 You plan to invest $5,000 in stock A, $5,000 in stock B, and $10,000 in stock C. a. Calculate the Beta of the portfolio. b. Based on your calculation above, calculate an investor's required return on the portfolio. Assume that the overall market rate of return is 15%, and the risk-free rate is 5%.
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