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You have a $250,000 portfolio consisting of J&J, Pfizer, and AMC. You put $100,000 in J&J, $80,000 in Pfizer, and the rest in AMC.
You have a $250,000 portfolio consisting of J&J, Pfizer, and AMC. You put $100,000 in J&J, $80,000 in Pfizer, and the rest in AMC. J&J, Pfizer, and AMC have betas of 0.72, 0.65 and 1.42, respectively. The risk-free return is 1.5% and the market return is 10.9 4a) What is your portfolio beta? 4b) which is the expected return for each of the stocks according to the CAPM? 4c) Which is the expect return of your portfolio according to your portfolio beta?
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
4th Edition
1439078084, 978-1439078082
