Question #2 Suppose you hold a portfolio that consists of 35% in Microsoft Co. stock, 35% in
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Question #2
Suppose you hold a portfolio that consists of 35% in Microsoft Co. stock, 35% in Treasury bills, and 30% Apple Co. stock.
Microsoft's beta is 1 and Apple's beta is 0.5. Treasury bills (the risk- free asset) offer a return of 4% and the expected return on the market is 11.5%.
Required: As per the capital asset pricing model, what return should you expect on your portfolio?
Related Book For
Financial Management Theory and Practice
ISBN: 978-0176517304
2nd Canadian edition
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
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