Author Question: Consider the two assets outlined in the table below. What is the beta of the two asset portfolio ... (Read 70 times)

RRMR · **on:** Apr 25, 2021

Question 1

Assume that the financial markets are in equilibrium. Information on three particular stocks is provided in the table below. Find the risk free rate and the expected return on the market portfolio.

Asset	Expected Return	Beta
A	7.6%	0.2
B	12.4%	0.8
C	15.6%	1.2

◦ 5%, 14%
◦ 5%, 18%
◦ 6%, 14%
◦ 6%, 18%
◦ 7%, 16%

Question 2

Consider the two assets outlined in the table below. What is the beta of the two asset portfolio given that 40% is invested in X?

Asset	Expected Return	Beta
X	12%	0.40
Risk Free	5%	0

◦ 0.026
◦ 0.085
◦ 0.160
◦ 0.190
◦ 0.220

izzat · **Reply #1 on:** Apr 25, 2021

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