Consider the following information:
Share Beta Expected return (%)
Lazy 1.5 15
Active 1.2 10
Suppose you have $30,000 in total. If you invest $15,000 in Share Lazy and the remainder in Share Active, what will the expected return on your portfolio be?
a. None of the other answers are true.
b. The expected return in your portfolio is 1.35%.
c. The expected return in your portfolio is 12%.
d. The expected return in your portfolio is 12.5%.