Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You have just invested in a new portfolio of three stocks. The amount of money that you invested in each stock and its beta are
You have just invested in a new portfolio of three stocks. The amount of money that you invested in each stock and its beta are summarized below: Stock. Investment. Beta A. $186,000. 1.55 B. 279,000. .60 C. 465,000. 1.20 Caluclate the beta of the portfolio and use the Capital Asset Pricing Model (CAPM) to compute the expected rate of the return for the portfolio. Assume that the expected rate of return on the market is 13 percent and that the risk-free rate is 6 percent.
Stock. Investment. Beta
A. $186,000. 1.55
B. 279,000. .60
C. 465,000. 1.20
Caluclate the beta of the portfolio and use the Capital Asset Pricing Model (CAPM) to compute the expected rate of the return for the portfolio. Assume that the expected rate of return on the market is 13 percent and that the risk-free rate is 6 percent.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started