Determine the expected return of the entire portfolio that are listed above Determine the beta of the entire portfolio listed above Given the information provided above, you are required to determine whether the three banks are overpriced, fairly or overpaid based on the information provided. Assume the risk- free rate is 8% and that the expected return on the market portfolio is 12%
Determine the expected return of the entire portfolio that are listed above Determine the beta of the entire portfolio listed above Given the information provided above, you are required to determine whether the three banks are overpriced, fairly or overpaid based on the information provided. Assume the risk- free rate is 8% and that the expected return on the market portfolio is 12%
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 20P
Related questions
Question
SHARE |
PERCENTAGE OF PORTFOLIO |
BETA |
EXPECTED RETURN (%) |
ABSA |
40 |
1.00 |
12 |
FNB |
25 |
0.75 |
11 |
CAPITEC |
35 |
1.30 |
15 |
Required:
- Determine the expected return of the entire portfolio that are listed above
- Determine the beta of the entire portfolio listed above
Given the information provided above, you are required to determine whether the three banks are overpriced, fairly or overpaid based on the information provided. Assume the risk- free rate is 8% and that the expected return on the market portfolio is 12%.
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