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Find the expected return on the portfolio Juno-Kilo

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Reference no: EM132740870

Question - You are considering a number of investments to decide if you should include them in your portfolio.

Investment Juno has a beta of 1.27 and Investment Kilo has a beta of 0.63.

The risk free rate is currently 0.75% and the market return is 5.5%.

Required -

a) Use the Capital Asset Pricing Model and find the required rate on each investment Juno and Kilo.

b) Find the expected return on the portfolio Juno-Kilo if the investments are held in the portfolio with 45% allocated to investment Juno and 55% allocated to investment Kilo.

Reference no: EM132740870

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