Did stock perform its expected return

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Reference no: EM131883868

Security           Actual Return              Std Dev           Beta

A                     27%                             20%                 1.6

B                     22%                             25%                 0.9

Risk free          3%                               0%                   0

In one year, we observe that Stock B exactly met its expectations.

1) What is the portfolio beta if you invest 20% in A, 45% in B, and 35% in the risk free asset?

2) What is the market premium?

3) Did Stock A (over/under/exactly) perform its expected return?

Reference no: EM131883868

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