An investor currently holds the following portfolio:
Amount
Invested
8,000 shares of Stock A $16,000 Beta = 1.3
15,000 shares of Stock B $48,000 Beta = 1.8
25,000 shares of Stock C $96,000 Beta = 2.2
a)The beta for the portfolio is
A) 1.99.
B) 1.77.
C) 1.45.
D) 1.27.
b) If the risk-free rate of return is 4% and the expected market return is 13%, then the required return on the portfolio is
A) 14.00%.
B) 17.91%.
C) 21.91%.
D) 23.85%.