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In: Finance

 You are putting together a portfolio made up of four different stocks. ​ However, you are...

 You are putting together a portfolio made up of four different stocks. ​ However, you are considering two possible​ weightings: 

Portfolio Weightings
Asset Beta First Portfolio Second Portfolio
A 2.5 10% 40%
B 1 10% 40%
C 0.5 40% 10%
D -1.5 40% 10%

1.  What is the beta on each​ portfolio? and which portfolio is​ riskier?

2.  If the​ risk-free rate of interest were 4 percent and the market risk premium were 5 percent​, what rate of return would you expect to earn from each of the​ portfolios?

Solutions

Expert Solution

calculations-

Please upvote if the ans is helpful,In case of doubt,do comment.Thanks.

jeff jeffy answered 2 years ago
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