INVESTMENTS(LL)W/CONNECT
INVESTMENTS(LL)W/CONNECT
11th Edition
ISBN: 9781260433920
Author: Bodie
Publisher: McGraw-Hill Publishing Co.
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Chapter 9, Problem 10PS
Summary Introduction

Adequate information:

Given situation

    Portfolio Expected return Beta
    A 20% 1.4
    B 25% 1.2

To determine:

whether given situation is possible as per CAPM

Introduction:

As per CAPM

Expected return of the portfolio = Risk free rate + Beta of the Portfolio* Market risk premium

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