Question
You own a portfolio that has 2,689 shares of stock A, which is priced at $19.20 per share and has an expected return of 11.48%,
You own a portfolio that has 2,689 shares of stock A, which is priced at $19.20 per share and has an expected return of 11.48%, and 2,518 shares of stock B, which is priced at $6.70 per share and has an expected return of 5.07%. The risk-free return is 3.96% and inflation is expected to be 2.59%. What is the expected real return for your portfolio?
A rate equal to or greater than 11.96% but less than 14.75%
A rate equal to or greater than 6.42% but less than 8.23%
A rate equal to or greater than 8.23% but less than 9.95%
A rate equal to or greater than 9.95% but less than 11.96%
A rate less than 6.42% or a rate greater than 14.75%
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