Question
You invest in a portfolio of 5 stocks with an equal investment in each one. The betas of the 5 stocks are as follows: .8,
You invest in a portfolio of 5 stocks with an equal investment in each one. The betas of the 5 stocks are as follows: .8, -1.3, .95, 1.2 and 1.4. The risk-free return is 3% and the market return is 7%.
A. Compute the beta of the portfolio.
B. Compute the required return of the portfolio.
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
15th edition
77861612, 1259194078, 978-0077861612, 978-1259194078
