Use the capital asset pricing model to determine what your


Use the Capital Asset Pricing Model to determine what your required rate of return (r hat) should be for A – D. Note: the 10 year Treasury bond yield of 2.50% serves as a proxy for nominal risk-free rate and the average return on the market, as measured by the S&P500 was 13.00%. A. Cheniere Energy, Inc. (LNG)- Beta = 4.98 B. Amazon (AMZN) – Beta= 0.78 C. Harley Davidson (HOG)- Beta= 0.93 D. Colgate-Palmolive Co. (CL)- Beta= 0.35 2. Assuming an equally weighted portfolio at 25% including the four aforementioned stocks (LNG, AMZN, HOG and CL), what should one’s required return be for this portfolio? Hint: First determine the Portfolio Beta (BP)

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Financial Management: Use the capital asset pricing model to determine what your
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