Question: Please answer question E. You could find the previous answers to answer that one on other posts. P8-27 Personal Finance Problem 3,5,6 Portfolio return and

Please answer question E. You could find the previous answers to answer that one on other posts. Please answer question E. You could find the previous answers to answer

P8-27 Personal Finance Problem 3,5,6 Portfolio return and beta Jamie Peters invested $100,000 to set up the following portfolio 1 year ago. Asset Cost Beta at purchase Yearly income Value today . $20,000 0.80 $1,600 $20,000 B 35,000 0.95 1,400 36,000 30,000 1.50 34,500 D 15,000 1.25 375 16,500 a. Calculate the portfolio beta on the basis of the original cost figures. b. Calculate the percentage return of each asset in the portfolio for the year. c. Calculate the percentage return of the portfolio on the basis of original cost, using income and gains during the year. d. At the time Jamie made his investments, investors were estimating that the market return for the coming year would be 10%. The estimate of the risk-free rate of return averaged 4% for the coming year. Calculate an expected rate of return for each stock on the basis of its beta and the expectations of market and risk-free returns. e. On the basis of the actual results, explain how each stock in the portfolio performed relative to those CAPM-generated expectations of performance. What factors could explain these differences

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