You own a portfolio consisting of 100 shares of Stock A (Beta A = 1), 150 shares of Stock B (Beta B = 1.2), and $3,000 invested in US Treasury Bills. US Treasury Bill rate is 2%. Estimate portfolio beta and portfolio expected return. Stock #Shares Price per share Expected Return Stock A 100 shares $20 17% Stock B 150 shares $10 20% a) Considering all the givens above, estimate your portfolio beta and expected return. b) Considering all the givens above, what is the expected return on a Stock C with beta=0.7.
You own a portfolio consisting of 100 shares of Stock A (Beta A = 1), 150 shares of Stock B (Beta B = 1.2), and $3,000 invested in US Treasury Bills. US Treasury Bill rate is 2%. Estimate portfolio beta and portfolio expected return. Stock #Shares Price per share Expected Return Stock A 100 shares $20 17% Stock B 150 shares $10 20% a) Considering all the givens above, estimate your portfolio beta and expected return. b) Considering all the givens above, what is the expected return on a Stock C with beta=0.7.
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
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You own a portfolio consisting of 100 shares of Stock A (Beta A = 1), 150 shares of Stock B (Beta B = 1.2), and $3,000 invested in US Treasury Bills. US Treasury Bill rate is 2%. Estimate portfolio beta and portfolio expected return.
Stock #Shares Price per share Expected Return
Stock A 100 shares $20 17%
Stock B 150 shares $10 20%
a) Considering all the givens above, estimate your portfolio beta and expected return.
b) Considering all the givens above, what is the expected return on a Stock C with beta=0.7.
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