Question: please help: SML, CAPM, Beta, Risk & Return Name: 1.) Nick Williams owns a 3-stock portfolio with a total investment value equal to $200,000. What

please help:

please help: SML, CAPM, Beta, Risk \& Return Name: 1.) Nick Williams

SML, CAPM, Beta, Risk \& Return Name: 1.) Nick Williams owns a 3-stock portfolio with a total investment value equal to $200,000. What is the weighted average beta of Nick's 3-stock portfolio? Recall that bp=i=1Nwibi What is the expected return of Nick's 3-stock portfolio? Expected rate of return =r^=i=1NPiri 2.) If the US T-Bond rate is 4.00%(rRF=5%), the required return on the stock market is 12%(rM=12%). What is the required rate of return for Stock REB if the company's beta is 0.5(bi=0.5),? a.) Use the SML equation to calculate rREB (the required return for REB. SML: ri=rRF+(rMrRF)bi b.) Identify rREB it on the graph below. c.) Calculate the Market Risk Premium (RPM) d.) What is beta for the market portfolio? e.) Is REB more or less risky than the stock

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