You form a portfolio with equal amounts in all three assets


Top-Risk Inc. has a beta of 3.8, while Safeway Inc. has a beta of -0.8. Risk-free T-bills offer a 4.5% return and the market risk premium is 16.5%. You form a portfolio with equal amounts in all three assets. Assume the CAPM model holds.

What is the expected return for the portfolio?

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Financial Management: You form a portfolio with equal amounts in all three assets
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