Question: Modern Portfolio Concepts CAPM RRR= RFR + (Beta x (Market Return - RFR)) Risk Free Rate 4.0% 3.5% 2.5% BETA 1.09 2.00 1.25 Market Return

Modern Portfolio Concepts
CAPM RRR= RFR + (Beta x (Market Return - RFR))
Risk Free Rate 4.0% 3.5% 2.5%
BETA 1.09 2.00 1.25
Market Return 8% 13% 14%
Risk Free Rate 4.0% 3.5% 2.5%
RRR 8.36% 22.50% 16.88%
Portfolio Return Investment % Return
Stock A $5,200 25.6% 25.0%
Stock B $4,100 20.2% 10.0%
Stock C $3,800 18.7% 3.0%
Stock D $7,200 35.5% 11.0%
Total Portfolio $20,300 Portfolio Return 12.9
Portfolio Return Investment Return
Stock A $2,500 15.6% 18.0%
Stock B $4,500 28.1% 8.0%
Stock C $3,500 5.0%
Stock D $5,500 14.1%
Total Portfolio $16,000 Portfolio Return
BETA Stock Price Stock Market Re New Stock Price
2.25 25 10%
1.5 32 25%
0.75 15 15%
1 37 35%
Portfolio Beta Investment % Beta
Stock A $6,500 2.0
Stock B $4,500 3.0
Stock C $3,500 0.8
Stock D $5,500 1.0
Total Portfolio $20,000 Portfolio Return

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