You are considering investing in a portfolio of 3 shares, A, B and C. You plan to
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Question:
You are considering investing in a portfolio of 3 shares, A, B and C. You plan to invest 45% of your funds in share A, 30% of your funds in share B and the remainder in share C. The expected return on shares A, B and C are shown in the following table along with the beta of each of the three different shares.
Share A | Share B | Share C | |
Expected return | 8% | 9% | 10% |
Beta | 1.0 | 1.20 | 1.30 |
a. What is the expected return on the portfolio? (3.25 marks)
b. What is the beta of the portfolio? (3 marks)
Related Book For
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
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