Question: You build a portfolio whose two components are the stock of Tesla and Sony which have betas equal to 0.9 and 0.4, respectively. Your weight

You build a portfolio whose two components are the stock of Tesla and Sony which have betas equal to 0.9 and 0.4, respectively. Your weight in Tesla is 0.45. The risk-premium of the market portfolio is 15%. What is the risk-premium of your portfolio if the CAPM model is a perfect description of reality?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!