Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 14P
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Question
Consider a portfolio consisting of the three risky stocks. You decide to invest 25 percent in Apple, 35 percent in HP and 40 percent in Spree. These stocks show the volatility at the level of 11.15 percent, 24.4 percent and 15.29 percent, and the correlation with the market portfolio at the level of 0.65, 0.83 and 0.36, respectively.
Calculate the expected portfolio return using CAPM if the market portfolio shows the expected return of 12.88 percent and its volatility is 10.05 percent. The risk-free rate of return is 3.31 percent.
Please make sure your answer is correct tutor. Out of my questions in Bartleby, 90% are wrong all the time. Which is resulting also to my low grades.
Don't get it if you don't know the answer. Please use TEXT. not snip or handwriting. Thank you
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