Expected return on portfolio, Finance Basics

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Expected return on portfolio

Problem:

UPS has a beta of 1.2 and Walmart has a beta of 0.8. The risk-free rate of interest is 4% and the market risk premium is 7%.

Required:

Question: What is the expected return on portfolio with 40% of its money in UPS and the balance in Walmart?

a. 9.91

b. 10.01

c. 10.72

d. 11.85

Note: Please show how to work it out.

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Finance Basics: Expected return on portfolio

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Finance Basics: Expected return on portfolio

Reference No:- TGS0880563

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Payback period without discounting cash flows

Q : Npv of accepting the lockbox agreement

Q : Effective after-tax interest rate expense

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Expected return on portfolio

Reference No:- TGS0880563

Recent Questions Asked Finance Basics

Q : Payback period without discounting cash flows

Q : Npv of accepting the lockbox agreement

Q : Effective after-tax interest rate expense

Q : Find out weighted average cost of capital

Q : Expected return on portfolio

Q : Determining the current price

Q : Find out firm earnings growth rate

Q : Current share price for the stock

Q : Find out the current share price

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