Question
You've assembled the following portfolio: Stock Beta Portfolio weight 1 1.4 0.4 2 1.1 0.2 3 0.5 0.4 The expected market return is 7% and
You've assembled the following portfolio:
| Stock | Beta | Portfolio weight |
| 1 | 1.4 | 0.4 |
| 2 | 1.1 | 0.2 |
| 3 | 0.5 | 0.4 |
The expected market return is 7% and the risk-free rate is 2%. Assume that the CAPM holds.
What is the beta of the portfolio?
What is the expected return of your portfolio?
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Interpreting and Analyzing Financial Statements
Authors: Karen P. Schoenebeck, Mark P. Holtzman
6th edition
132746247, 978-0132746243
