Multiple Choice
An investor is forming a portfolio by investing $50,000 in stock A which has a beta of 1.50, and $25,000 in stock B which has a beta of 0.90. The return on the market is equal to 6 percent and Treasury bonds have a yield of 4 percent. What is the required rate of return on the investor's portfolio?
A) 6.6%
B) 6.8%
C) 5.8%
D) 7.0%
E) None of the answers above is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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