c) Nico owns 100 shares of stock X which has a price of R12 per share and 200 shares of stock Y which has a price of R3 per share. What is the proportion of Nico's portfolio invested in stock X? d) Given that the expected return on asset X is 20 percent, its beta is 1.5, and the risk free rate is 5 percent; What is the expected market return?
c) Nico owns 100 shares of stock X which has a price of R12 per share and 200 shares of stock Y which has a price of R3 per share. What is the proportion of Nico's portfolio invested in stock X? d) Given that the expected return on asset X is 20 percent, its beta is 1.5, and the risk free rate is 5 percent; What is the expected market return?
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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Please show all workings and round off final answer to 2 decimal places.
Transcribed Image Text:c) Nico owns 100 shares of stock X which has a price of R12 per
share and 200 shares of stock Y which has a price of R3 per share.
What is the proportion of Nico's portfolio invested in stock X?
d) Given that the expected return on asset X is 20 percent, its beta is
1.5, and the risk free rate is 5 percent;
What is the expected market return?
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