Assume that the treasury yield is currently 2.3%, the expected market risk premium 6.7%, and the equity
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Question:
Assume that the treasury yield is currently 2.3%, the expected market risk premium 6.7%, and the equity betas for firms A and B are 1.111 and 2.222. You create a portfolio by investing $5,000 in shares of firm A and $5,000 in shares of firm B.
What is your portfolio’s expected return?
10%
2.3%
7.2%
13.5%
Related Book For
Fundamentals of Financial Management
ISBN: 978-1305635937
Concise 9th Edition
Authors: Eugene F. Brigham
Posted Date: