An investor currently has all of his wealth in treasury


An investor currently has all of his wealth in Treasury bills. He is considering investing 80% of his funds in General Electric, whose beta is 4.50, with the remainder left in Treasury bills. GE has an expected return of 25% and Treasury bills have an expected return of 2%. What are the investor’s portfolio beta and portfolio expected return?

A.        Portfolio beta = 0.9, and Portfolio expected return = 20.4%.

B.        Portfolio beta = 3.8, and Portfolio expected return = 24.0%.

C.        Portfolio beta = 3.6, and Portfolio expected return = 20.4%.

D.        Portfolio beta = 3.8, and Portfolio expected return = 22.0%.

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Financial Accounting: An investor currently has all of his wealth in treasury
Reference No:- TGS01106521

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