Required: Lisa’s portfolio has provided the rates of return of 16.6%, 17.2%, - 9.6%, 15.5% and 18.4% over the past five years, respectively. Calculate the geometric average return of the portfolio for this period? 2. Assume that expected return of the stock A in Lisa’s portfolio is 19.5%. The risk premium on the stocks of the same industry are 7.8%. The current Treasury Bond has the return rate of 7%. Calculate the beta of the stock using Capital Asset Pricing Model (CAPM).

Required: Lisa’s portfolio has provided the rates of return of 16.6%, 17.2%, - 9.6%, 15.5% and 18.4% over the past five years, respectively. Calculate the geometric average return of the portfolio for this period? 2. Assume that expected return of the stock A in Lisa’s portfolio is 19.5%. The risk premium on the stocks of the same industry are 7.8%. The current Treasury Bond has the return rate of 7%. Calculate the beta of the stock using Capital Asset Pricing Model (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

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 13P

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