The market portfolio has an expected return of 10% and consists of 30% in stock and 70%

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The market portfolio has an expected return of 10% and consists of 30% in stock and 70% in real estate,and the risk-free interest rate is 5%.Based on the single-factor CAPM model and the following information on stock and property returns.

The standard deviation of stock performance:0.2

The standard deviation of real estate performance:0.1

The correlation between stock return and real estate return:0.3

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What is the expected return for the stock?

What is the expected return for the real estate?

Related Book For answer-question

Intermediate Financial Management

ISBN: 9780357516669

14th Edition

Authors: Eugene F Brigham, Phillip R Daves

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Posted Date: Sep 07, 2023 12:00 AM

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The market portfolio has an expected return of 10% and consists of 30% in stock and 70%

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Intermediate Financial Management

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