Expected return for capital-asset-pricing model


Problem: Suppose you have invested $30,000 in the following four stocks:

Security Amount Invested Beta
Stock A $5,000 0.75
Stock B $10,000 1.1
Stock C $8,000 1.36
Stock D $7,000 1.88

The risk-free rate is 4 percent and the expected return on the market portfolio is 15 percent. Based on the capital-asset-pricing model, what is the expected return on the above portfolio?

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Finance Basics: Expected return for capital-asset-pricing model
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