You have a fairly strong investment portfolio (see amounts and Beta values below). However, a new opportunity
Question:
You have a fairly strong investment portfolio (see amounts and Beta values below). However, a new opportunity has presented itself and you are unsure if it is worth the investment.
a) Given that the projected market return is 9% and a risk free rate of 3.25%, what return would you require from this new investment for it to be attractive.
b) Once you've calculated the result, explain the answer.
Asset /Investment Amount/ Beta
A $2, 050 1.81
B $3, 325 0.83
C $4,725 1.14
D $6, 285 0.31
E $2,062 0.04
F $4,650 0.18
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill