Suppose Woolworths has a beta of 0.69 and Qantas has a beta of 1.38. The risk-free...
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Suppose Woolworths has a beta of 0.69 and Qantas has a beta of 1.38. The risk-free interest rate is 4.30% and the market risk premium is 6.40%. According to the CAPM, what is the expected return on a portfolio with 40% invested in Woolworths, 34% invested in Qantas, and 19% invested in a market security (a diversified portfolio with systematic risk equivalent to the market) and the remainder invested in a risk-free security? Give you answer as a decimal to four decimal places. Suppose Woolworths has a beta of 0.69 and Qantas has a beta of 1.38. The risk-free interest rate is 4.30% and the market risk premium is 6.40%. According to the CAPM, what is the expected return on a portfolio with 40% invested in Woolworths, 34% invested in Qantas, and 19% invested in a market security (a diversified portfolio with systematic risk equivalent to the market) and the remainder invested in a risk-free security? Give you answer as a decimal to four decimal places.
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Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1305637108
6th edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date:
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