Question: I only need help on part D The risk free rate is 4%, and the required return on the market is 12%. a) What is
I only need help on part D
The risk free rate is 4%, and the required return on the market is 12%. a) What is the required return on an asset with a beta of 1.5? 4% + (12%-4%)x 1.5 16% b) What is the reward/risk ratio given the required rate of return from (a)7(16%-4%), 1.5-.08 c) What is the required return on a portfolio consisting of 40% of the asset above and the rest in an asset with an average amount of systematic risk? (hint: asset with an average amount of systematic risk has beta of 1) 16%x.40+12%-13.60% d) What is the required return on a portfolio consisting of 30% of the asset above and the rest in an asset with a risk free asset
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