Find what is the expected return of the portfolio

Reference no: EM132017845

Question: You are the new VP Treasury at Morgoth's Amusements, a manufacturer of fantasy-themed carnival rides. You are reviewing your predecessor's investments. The Board of Directors have set the required rate for long-term investments at a minimum of 11.5%. Below is the portfolio of investments:

Stock	Investment	Beta
Balrog Hot Yoga Centres	$4,250,000	1.92
Gondolin Security	$2,355,000	0.93
Ulmo's Beach Resorts	$720,000	1.4
IBM Corp	$1,850,000	0.87

If the return on the market portfolio is 9% and the 90-day T-Bills are selling at 2% (the risk-free rate); is the expected return of the portfolio aligned with the required return as set by the Board of Directors?

Reference no: EM132017845

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