Question: How do I solve this? You have a portfolio that is invested 25% in the risk-free asset, 25% in a market index fund, 25% in
How do I solve this?
You have a portfolio that is invested 25% in the risk-free asset, 25% in a market index fund, 25% in a stock with a beta of 0.97, and 25% in a stock with a beta of 1.73. If the risk-free rate is 3% and the market risk premium is 14%, what is the expected return on your portfolio?
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