You know that treasury bills have a beta of 0 because they, Ask an Expert

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You know that Treasury bills have a beta of 0 because they are risk-free. A portfolio of technology stocks has a beta of 3. You plan to invest 40% of your investment capital in Treasury bills and the remaining in the technology stock portfolio. Additionally you know that the risk-free rate is 4% and the market risk premium is 6%. Estimate first the average beta of your investment in the T-Bills and the technology stock portfolio and then the expected rate of return you should earn on this portfolio.

ANSWER: Expected Rate of Return: __________________

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9525152

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