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You are considering creating a diversified portfolio consisting of the following 5 shares. Share A B C D E Beta 1.33 0.70 1.50 0.66 1.20 If currently the risk-free rate equals 5% and the return on the market portfolio is 11%, calculate the return of each share according to Capital Asset Pricing Model (CAPM). If you want to invest $1,500
You are considering creating a diversified portfolio consisting of the following 5 shares.
Share | A | B | C | D | E |
Beta | 1.33 | 0.70 | 1.50 | 0.66 | 1.20 |
- If currently the risk-free rate equals 5% and the return on the market portfolio is 11%, calculate the return of each share according to Capital Asset Pricing Model (CAPM).
- If you want to invest $1,500 in Share A, $3,000 in Share B, $6,000 in Share C, $1,500 in Share D and $3,000 in Share E, Calculate the weights of each share in the portfolio.
- Calculate the return of the portfolio.
- Calculate the portfolio beta.
Related Book For
Financial Management Principles and Applications
12th edition
Authors: Sheridan Titman, Arthur Keown, John Martin
ISBN: 978-0133423822
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