Expected return of individual stock-portfolio

Reference no: EM1390767

You're considering investing in a portfolio of the common stocks of four publicly-traded companies with betas as follows:

ABC - 0.7

DEF - 0.9

GHI - 1.3

JKL - 1.9

If the risk-free rate is 4% and the market rate is 12.5%, what is your expected rate of return in:

a. ABC?

b. DEF?

c. GHI?

d. JKL?

If your portfolio is 20% in ABC, 30% in DEF, 30% in GHI, and 20% in JKL, what is your portfolio (weighted average) expected rate of return?

Reference no: EM1390767

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