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Your client comes to you with the following exiting portfolio of three individual stocks: [Chap 13] Stocks in Portfolio Portfolio Weights CAPM Expected Returns Visa
Your client comes to you with the following exiting portfolio of three individual stocks: [Chap 13]
Stocks in Portfolio | Portfolio Weights | CAPM Expected Returns |
| 40% | 12% |
| 30% | 5% |
| 30% | 14% |
100% |
A. What is your clients expected portfolio return?
B. Sysco has a beta of .4. If the risk-free rate is 2%, what must be the market risk premium according the Capital Asset Pricing Model (CAPM) if Sysco is expected to earn 5% like it shows in the table?
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