Consider a portfolio that comprise of 35% INP-INVESTEC PLC stock, 35% INLINVESTEC LTD stock, and 30% DRD-DRD Gold stock. INP-INVESTEC PLC has a beta of 1, INL-INVESTEC LTD has a beta of 3.0, and DRD-DRD Gold has a beta of 0.5. The risk free asset currently offer a return of 4%, and the expected return on the market is 11.5%. What return should you expect on your portfolio according to the CAPM?

Consider a portfolio that comprise of 35% INP-INVESTEC PLC stock, 35% INLINVESTEC LTD stock, and 30% DRD-DRD Gold stock. INP-INVESTEC PLC has a beta of 1, INL-INVESTEC LTD has a beta of 3.0, and DRD-DRD Gold has a beta of 0.5. The risk free asset currently offer a return of 4%, and the expected return on the market is 11.5%. What return should you expect on your portfolio according to the CAPM?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 3P: Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...

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