Create a two-stock portfolio

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Reference no: EM132020071

Suppose you would like to invest $10000 in the stock market. You want to create a two-stock portfolio including the following two stocks: $4000 invested in Wal-mart, with beta equal to 0.3, and $6000 invested in Nordstrom, with beta equal to 1.5.

1. What is portfolio's beat?

2. If the risk free rate is 2%, and the market risk premium is 5%, what is the required rate of return on your portfolio?

Reference no: EM132020071

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