Question: Please show complete EXCEL formula and answer all problems You have recently inherited the following portfolio: Stock Investment Stocks Beta A $250,000,000 1.20 B $150,000,000
Please show complete EXCEL formula and answer all problems
| You have recently inherited the following portfolio: | ||||||
| Stock | Investment | Stocks Beta | ||||
| A | $250,000,000 | 1.20 | ||||
| B | $150,000,000 | 1.00 | ||||
| C | $100,000,000 | 0.90 | ||||
| The probability distribution of the expected market returns and the risk-free rate for the next period are: | ||||||
| Probability | Market Return | Risk-Free Rate | ||||
| 25.0% | 8.00% | 3.00% | ||||
| 50.0% | 10.00% | 3.00% | ||||
| 25.0% | 12.00% | 3.00% | ||||
| What is the beta of the portfolio? What is the expected market return? Using the Security Market Line equation, compute the portfolios required rate of return for the next period. | ||||||
| Use the scratchpad to show your work in Excel. Type your numercial answers into the yellow cells below. Answers should be to two decimal places, e.g. 1.23% or $123.45. | ||||||
| Portfolio's Beta | ||||||
| Expected Market Return | ||||||
| Portfolio's Required Rate of Return | ||||||
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