An investor has $70,000 invested in a stock that has an estimated beta and another $30,000 invested in the stock of the company for which she works The risk-free rate is 3.2% and the market risk premium is 6.8%. The investor calculates that the required return on her portfolio is 11.5%. What is the beta of the company for which she works?

An investor has $70,000 invested in a stock that has an estimated beta and another $30,000 invested in the stock of the company for which she works The risk-free rate is 3.2% and the market risk premium is 6.8%. The investor calculates that the required return on her portfolio is 11.5%. What is the beta of the company for which she works?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 15MC

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