Assume that you hold a well-diversified portfolio that has an expected return of 8.02% and a beta of 0.99. You are in the process of buying 1,000 shares of Alpha Corp at $10 a share and adding it to your portfolio. Alpha has an expected return of 13.10% and a beta of 1.48. The total value of your current portfolio is $90,000. What is the expected return of the new portfolio?
Assume that you hold a well-diversified portfolio that has an expected return of 8.02% and a beta of 0.99. You are in the process of buying 1,000 shares of Alpha Corp at $10 a share and adding it to your portfolio. Alpha has an expected return of 13.10% and a beta of 1.48. The total value of your current portfolio is $90,000. What is the expected return of the new portfolio?
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 25P
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