Suppose Avis Budget Group stock has a beta of 2.65, whereas Costco stock has a beta of 0.51. If the risk-free interest rate is 3.82% and the expected return of the market portfolio is 11.93%, what is the expected return of a portfolio that consists of 45% Avis Budget Group stock and 55% Costco stock, according to the CAPM? The beta of the portfolio is (Round to two decimal places.) The expected return of the portfolio is %. (Round to two decimal places.) D
Suppose Avis Budget Group stock has a beta of 2.65, whereas Costco stock has a beta of 0.51. If the risk-free interest rate is 3.82% and the expected return of the market portfolio is 11.93%, what is the expected return of a portfolio that consists of 45% Avis Budget Group stock and 55% Costco stock, according to the CAPM? The beta of the portfolio is (Round to two decimal places.) The expected return of the portfolio is %. (Round to two decimal places.) D
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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Transcribed Image Text:Suppose Avis Budget Group stock has a beta of 2.65, whereas Costco stock has a beta of 0.51. If the risk-free interest rate is 3.82% and the expected return of the market portfolio is 11.93%, what is the
expected return of a portfolio that consists of 45% Avis Budget Group stock and 55% Costco stock, according to the CAPM?
The beta of the portfolio is
(Round to two decimal places.)
The expected return of the portfolio is%. (Round to two decimal places.)
(...)
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