A portfolio comprises two securities and the expected return on them is 12% and 16% respectively. Determine
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Question:
A portfolio comprises two securities and the expected return on them is 12% and 16% respectively. Determine return of portfolio if first security constitutes 40% of total portfolio.
2. Consider a portfolio comprised a four securities in the following proportions and with the indicated security beta.
Security | Amount invested | Beta | Expected return |
A | 1.5 million / 33.3% | 1.0 | 12.0% |
B | 1.0 million / 22.2% | 1.5 | 13.0% |
C | 2 million / 44.4% | 0.8 | 9.0 % |
A. What is portfolio's beta ?
B. What is the portfolio's expected return?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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