What is the expected return and beta of your portfolio using the following data: Market risk premium

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What is the expected return and beta of your portfolio using the following data: Market risk premium = 8 percent Risk-free rate = 4 percent Beta of XYZ = 1.5; Beta of PDQ = 2.0 Investment in XYZ stock = $50,000 Investment in PDQ stock = $100,000 You have no other financial assets Beta of Portfolio = 1.83

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Investments

ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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