Question
You have a stock portfolio that consists of the following positions: Corporation Shares Price Beta Amazon 25 $3299.86 1.16 Apple 90 $143.76 1.22 Tesla 85
You have a stock portfolio that consists of the following positions:
| Corporation | Shares | Price | Beta |
| Amazon | 25 | $3299.86 | 1.16 |
| Apple | 90 | $143.76 | 1.22 |
| Tesla | 85 | $818.32 | 1.89 |
| Costco | 75 | $450.66 | 0.64 |
| Disney | 50 | $174.41 | 1.2 |
A. What is the portfolio beta? [Enter your answer with 2 decimal places; Hint: Compute the portfolio weights for each stock.]
B. If the market return is expected to be 7% and the risk-free rate is 3%, then what is the required rate of return of the portfolio? % [Enter your answer as a percentage with 2 decimals, e.g. 10.25 for 10.25%.]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
A To calculate the portfolio beta we first need to calculate the weighted average beta of the indivi...
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Step: 2
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Understanding Basic Statistics
Authors: Charles Henry Brase, Corrinne Pellillo Brase
6th Edition
978-1133525097, 1133525091, 1111827028, 978-1133110316, 1133110312, 978-1111827021
