Given the following information for the two stocks: Stock Investment Beta A $30,000 1.2 B $20,000 0.8

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Given the following information for the two stocks:

Stock Investment Beta

A $30,000 1.2

B $20,000 0.8

Assume the risk-free rate is 3 percent and the market risk premium is 9%. A portfolio is constructed according to the amount stated in the investment column. What is the expected return of portfolio AB, given that CAPM holds?

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Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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Posted Date: Mar 28, 2024 06:24 AM

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Given the following information for the two stocks: Stock Investment Beta A $30,000 1.2 B $20,000 0.8

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Introduction To Corporate Finance

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