Question
You are invested in the following portfolio: Stock A Stock B Stock C Stock D Beta 1.2 2.4 1.8 -1.00 Expected Return 10% 20% 15%
You are invested in the following portfolio:
| Stock A | Stock B | Stock C | Stock D | |
| Beta | 1.2 | 2.4 | 1.8 | -1.00 |
| Expected Return | 10% | 20% | 15% | -2% |
| Weight | 20% | 60% | 20% | 0% |
Calculate the current beta and expected return of the portfolio. How would you alter the weights on Stock B and Stock D to achieve a portfolio that earns the market return? What is the beta and expected return on this new portfolio?
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The Financial Services Marketing Handbook
Authors: Evelyn Ehrlich
2nd Edition
1118065719, 978-1118065716
