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Determine the expected return of the proposed portfolio

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An investor currently has all of his wealth in T-bills. He is considering investing 3/5th of his funds in alphabet, inc., whose beta is 1.20, 1/5th of his funds in apple, inc., whose beta is 1.15 and the remainder left in t-bills. The expected risk-free rate is 4 percent and the market risk premium is 6.8 percent.

Problem 1: Determine the beta of the proposed portfolio

Problem 2: Determine the expected return of the proposed portfolio.

Reference no: EM132795194

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