Adidas' stock has a beta of 2.50, and Under Armour's stock has a beta of 0.76. The he risk-free rate is 6.5% and the expected return on the market is 11.5%,. You have a portfolio that is 60% Adidas stock and 40% Under Armour stock. Under CAPM, what is your portfolio's expected return? Question content area bottom Part 1 The expected return is enter your response here%. (Round to two decimal places.)
Adidas' stock has a beta of 2.50, and Under Armour's stock has a beta of 0.76. The he risk-free rate is 6.5% and the expected return on the market is 11.5%,. You have a portfolio that is 60% Adidas stock and 40% Under Armour stock. Under CAPM, what is your portfolio's expected return? Question content area bottom Part 1 The expected return is enter your response here%. (Round to two decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Adidas' stock has a beta of
2.50,
and Under Armour's stock has a beta of
0.76.
The he risk-free rate is
6.5%
and the expected return on the market is
11.5%,.
You have a portfolio that is
60%
Adidas stock and
40%
Under Armour stock. Under CAPM, what is your portfolio's expected return?Question content area bottom
Part 1
The expected return is
enter your response here%.
(Round to two decimal places.)Expert Solution
Step 1: Background
CAPM is capital asset pricing model to compute the cost of equity based on company risk index as compared to the market
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