Assume that you own a portfolio consisting of the following stocks: Stock Percentage of Portfolio Beta Expected Return 25% 1.20 24% 30% 1.60 12% 10% 1.0 20% 20% 0.60 14% 15% 0.85 16% a. Calculate the expected return of your portfolio. (NB: The expected return of a portfolio equals the weighted average of the individual stock's expected returns, where the weights are the percentage BCDE
Assume that you own a portfolio consisting of the following stocks: Stock Percentage of Portfolio Beta Expected Return 25% 1.20 24% 30% 1.60 12% 10% 1.0 20% 20% 0.60 14% 15% 0.85 16% a. Calculate the expected return of your portfolio. (NB: The expected return of a portfolio equals the weighted average of the individual stock's expected returns, where the weights are the percentage BCDE
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 25P
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![Question 1
Assume that you own a portfolio consisting of the following stocks:
Stock
Percentage of Portfolio
Beta
Expected Return
25%
1.20
24%
30%
1.60
12%
C.
10%
|1.0
20%
D.
20%
0,60
14%
15%
0.85
16%
a. Calculate the expected return of your portfolio. (NB: The expected
return of a portfolio equals the weighted average of the individual
stock's expected returns, where the weights are the percentage
invested in each stock.)
b. Calculate the portfolio beta.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcf35951d-b484-46bb-ac46-25fb67c2f562%2F54f1a0e6-cdde-4b27-a1c9-04e98ca3f901%2Fwlzqytd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 1
Assume that you own a portfolio consisting of the following stocks:
Stock
Percentage of Portfolio
Beta
Expected Return
25%
1.20
24%
30%
1.60
12%
C.
10%
|1.0
20%
D.
20%
0,60
14%
15%
0.85
16%
a. Calculate the expected return of your portfolio. (NB: The expected
return of a portfolio equals the weighted average of the individual
stock's expected returns, where the weights are the percentage
invested in each stock.)
b. Calculate the portfolio beta.
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