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You have a fairly strong investment portfolio (see amounts and beta value below). However, a new opportunity has presented itself and you are unsure if
You have a fairly strong investment portfolio (see amounts and beta value below). However, a new opportunity has presented itself and you are unsure if it is worth the investment. Given that the projected market return is 12% and the risk free rate is 3%, what return would you require from this new investment for it to be attractive. Once you've calculated the result, explain the answer.
Asset Investment Amount Beta
A $50,000 0.5
B $75,000 0.63
C $33,000 0.87
D $97,000 0.99
E $120,000 1.6
F $234,000 1.45
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