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%.
1.Compute the beta of the portfolio.
2.Compute the required return of the portfolio.
show work please
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
