What rate of return would expect to earn from portfolio


Portfolio Beta and Capital Asset Pricing Model(CAPM).

Asset               Beta                       First Portfolio                Second Portfolio

A                       2.40                          20%                                   30%

B                       0.90                           20%                                  30%

C                       0.60                           30%                                   20%

D                     -1.60                            30%                                  20%

a.)What is the beta for each portfolio?( I have 0.36 for First and 0.79 for Second)

b.) If the risk free rate on interest were 4.5% and the market risk premium were 7.5%, what rate of return would you expect to earn from each portfolio?

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Finance Basics: What rate of return would expect to earn from portfolio
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