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You have are looking at an investment portfolio that will yield the following. Stock Probability Beta Expected Return 1 0.35 1.20 13% 2 0.37 0.75
You have are looking at an investment portfolio that will yield the following.
Stock | Probability | Beta | Expected Return |
1 | 0.35 | 1.20 | 13% |
2 | 0.37 | 0.75 | 18% |
3 | 0.28 | 1.60 | 24% |
If you, as the investor, have a required rate of return of 18.5%, would this portfolio be a good investment?
No, because the portfolio return is lower than my required rate of return | ||
No, because the portfolio return and my required rate of return are equal | ||
Yes, because the portfolio return is higher than my required rate of return | ||
There is not enough information to answer the question |
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