Consider the information for a portfolio reported in the following table.

 

Stock	Portfolio Weight (%)	Stock Beta
A	0.21	0.70
B	0.29	1.10
C	0.26	0.80
D	0.24	1.20

 

If the risk free rate is 0.75% and the expected return on the market is 8%, calculate the expected return for this portfolio using a portfolio beta and the capital asset pricing model (CAPM).

 

(Include enough working to show you understand the calculations.)

Answer rating: 100% (QA)

To calculate the expected return for the portfolio using CAPM we need to use the follow... View the full answer