Expected return on the portfolio for capital-asset-pricing


Suppose you have invested $50,000 in the following four stocks:

Security Amount Invested Beta
Stock A $10,000 0.7
Stock B 15,000    1.2
Stock C 12,000    1.4
Stock D 13,000    1.9

The risk-free rate is 5 percent and the expected return on the market portfolio is 18 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 on the portfolio for capital-asset-pricing
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