What is the expected return on johns revised portfolio


Problem

John Smith has the following portfolio:

Stock          Investment        Beta
A                   $50,000           1.40
B                   $150,000         0.80
C                   $125,000         1.00
D                   $50,000           1.20

He plans to sell Stock A and replace it with Stock E which has a beta of 0.80. If the government bond rate is 4% and the market return is 10%, what is the expected return on John's revised portfolio?

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Financial Accounting: What is the expected return on johns revised portfolio
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