Essay
Use the following data:
Market risk premium = 10%
Risk-free rate = 2%
Beta of XYZ stock = 1.6
Beta of PDQ stock = 2.4
Investment in XYZ stock = $15,000
Investment in PDQ stock = $60,000
You have no assets other than your investments in XYZ and PDQ stock.
What is the expected return of your portfolio? Show all work.
Correct Answer:
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Portfolio Beta method:
Bp = (15/75 × 1.6...View Answer
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Correct Answer:
Verified
Bp = (15/75 × 1.6...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
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