Capm model expected return

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Problem: Rf=2%, Rm= 10% According to the CAPM model Expected Return X= 10 Expected Return Y= 6

Portfolios:

A portfolio of stock X and rf with a 50% equal weighted investment yielded a STANDARD DEVIATION of 3.

A portfolio of stock Y and rf with a 25% investment in stock Y yielded a STANDARD DEVIATION of 1.

A portfolio of the market and rf with a 50% investment in the market yielded a STANDARD DEVIATION of 1.

An equally weighted portfolio of stock X and Y yielded a variance of 1.

  • Find the variance of the portfolio that invests EQUALLY WEIGHTED in X, Y, and Rf.
  • Find the BETA of the portfolio that invests EQUALLY WEIGHTED in X, Y, and Rf.

Reference no: EM132509882

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