An investor has a portfolio of two securities, a stock with a beta of 1.24 and a risk-free asset. The stock has an expected return of 13.68% and the risk-free asset has an expected return of 2.80%. The portfolio beta is 0.65. What rate of return should the investor expect to earn on her portfolio?
An investor has a portfolio of two securities, a stock with a beta of 1.24 and a risk-free asset. The stock has an expected return of 13.68% and the risk-free asset has an expected return of 2.80%. The portfolio beta is 0.65. What rate of return should the investor expect to earn on her portfolio?
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 6P
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An investor has a portfolio of two securities, a stock with a beta of 1.24 and a risk-free asset. The stock has an expected return of 13.68% and the risk-free asset has an expected return of 2.80%. The portfolio beta is 0.65. What
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