Question
You want to invest $100,000 in a portfolio with an expected return of 12.4%. Alpha Corp. has a beta of 1.2 and an expected return
You want to invest $100,000 in a portfolio with an expected return of 12.4%. Alpha Corp. has a beta of 1.2 and an expected return of 11.2%, and Beta Corp. has a beta of 1.8 and an expected return of 14.8%. The risk-free rate is 4%. You can invest in Alpha Corp. and Beta Corp. How much will you invest in each? What will be your portfolio beta?
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Financial Institutions Management A Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett, Otgo Erhemjamts
10th Edition
1260013820, 978-1260013825
