Question: Find the expected return for the following portfolio. Expected Return Beta %invested Stock A 30% 1.75 35% Stock B 20% 2.75 30% Stock C 15%

Find the expected return for the following portfolio.

Expected Return Beta %invested
Stock A 30% 1.75 35%
Stock B 20% 2.75 30%
Stock C 15% 1.80 20%
Stock D 10% 1.00 15%

Find the required return for the portfolio if the risk free rate is 4% and the market return is 9% (use SML equation).

Is the portfolio a buy or sell?

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