The quoted rate of a short-term government security is 2%. A premium of 3% is added...

Transcribed Image Text:

The quoted rate of a short-term government security is 2%. A premium of 3% is added to the risk-free rate to reflect the average market return. What is the required rate of return of the portfolio? (Format: XX.XX96) National Co. has a collection of publicly traded shares below: Stock Invested Amount Beta 1,400,000 1,200,000 600,000 800,000 ABC CDE EFG HIJ 1.8 2.2 1.4 0.6 The quoted rate of a short-term government security is 2%. A premium of 3% is added to the risk-free rate to reflect the average market return. What is the required rate of return of the portfolio? (Format: XX.XX96) National Co. has a collection of publicly traded shares below: Stock Invested Amount Beta 1,400,000 1,200,000 600,000 800,000 ABC CDE EFG HIJ 1.8 2.2 1.4 0.6

Answer rating: 100% (QA)

SOLUTION To calculate the required rate of return for the portfolio we can use the Capital Asset Pri... View the full answer