Expected return on portfolio


Problem: UPS has a beta of 1.2 and Wal-Mart 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 Wal-Mart?

  • 9.91
  • 10.01
  • 10.72
  • 11.85

Note: Please answer in proper manner and show all computations

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Accounting Basics: Expected return on portfolio
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