(10 points) Consider the following 4-stock portfolio: Stock Investment Beta $100,000 1.50 $150,000 -0.25 $250,000 1.25...

 

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(10 points) Consider the following 4-stock portfolio: Stock Investment Beta $100,000 1.50 $150,000 -0.25 $250,000 1.25 $500,000 0.75 A B C D The market required rate of return is 12 percent and the risk-free rate is 4 percent. a. Find the required rates of return of the four stocks in the portfolio. b. Find 3p, the beta of this portfolio. c. Use the portfolio 3, you obtained in part b. and the SML to find the required rate of return of the portfolio. (10 points) Consider the following 4-stock portfolio: Stock Investment Beta $100,000 1.50 $150,000 -0.25 $250,000 1.25 $500,000 0.75 A B C D The market required rate of return is 12 percent and the risk-free rate is 4 percent. a. Find the required rates of return of the four stocks in the portfolio. b. Find 3p, the beta of this portfolio. c. Use the portfolio 3, you obtained in part b. and the SML to find the required rate of return of the portfolio.