Problema stock has a beta of 11 an expected return of 1244, Ask an Expert

Accounting

Problem:

A stock has a beta of 1.1 an expected return of 12.44 percent and lies on the security market line. A risk-free asset is yielding is 3.2 percent. You want to create a $15,000 portfolio that is comprised of these two securities and that will have a portfolio beta of .7.

Required:

Question: What is the expected return on this portfolio?

Note: Be sure to show how you arrived at your answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170056

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