Putting together a portfolio made up of four different stock

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Reference no: EM131117653

Portfolia Beta and CAPM ) You are putting together a portfolio made up of four different stocks. However, you are considering two possible weightings: Portfolio Weightings Asset Beta First Portfolio Second Portfolio A 2 12% 38% B 0.95 12% 38% C 0.45 38% 12% D -1.7 38% 12%

a.What is the beta on each portfolio?

b.Which portfolio is riskier?

c.If the risk-free rate of interest were 3.5 percent and the market risk premium were 5.5 percent, what rate of return would you expect to earn from each of the portfolios?

Reference no: EM131117653

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