Your portfolio consists of Php100,000 invested in a stock that has a beta = 0.8, Php150,000 invested in a stock that has a beta = 1.2, and Php50,000 invested in a stock that has a beta = 1.8. The risk-free rate is 7 percent. Last year this portfolio had a required rate of return of 13 percent. This year nothing has changed except for the fact that the market risk premium has increased by 2 percent (two percentage points). What is the portfolio’s current required rate of return? Choices 16.25% 11.45% 16.33% 15.33%
Your portfolio consists of Php100,000 invested in a stock that has a beta = 0.8, Php150,000 invested in a stock that has a beta = 1.2, and Php50,000 invested in a stock that has a beta = 1.8. The risk-free rate is 7 percent. Last year this portfolio had a required rate of return of 13 percent. This year nothing has changed except for the fact that the market risk premium has increased by 2 percent (two percentage points). What is the portfolio’s current required rate of return? Choices 16.25% 11.45% 16.33% 15.33%
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 25P
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Question
Your portfolio consists of Php100,000 invested in a stock that has a beta = 0.8, Php150,000 invested in a stock that has a beta = 1.2, and Php50,000 invested in a stock that has a beta = 1.8. The risk-free rate is 7 percent. Last year this portfolio had a required
Choices
16.25%
11.45%
16.33%
15.33%
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