Question: Q1) a) what does beta measure, and what does a beta of 0.5 m, 1 and 1.5 mean? b) What factors determine the level

Q1) a) what does beta measure, and what does a beta of 

 




Q1) a) what does beta measure, and what does a beta of 0.5 m, 1 and 1.5 mean? b) What factors determine the level of a beta which a company may have? c) Samuel shalobela conducts business in an economy whose market return is 20% and Risk free rate is 12%. He is considering creating a portfolio of investments and the securities under consideration have the following information: Security. Percentage of Portfolio. Beta. Return. A 20% 0.9. 19.2 B 10% 1.25. 22 C 15% 1.1. 20.8 D 20% 115. 21.2 E 35% 0.7. 17.6 Required: i) Calculate the beta for the portfolio ii) Calculate the portfolio expected return iii) Calculate Required Rate of Return fir Samuel.

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