Reference no: EM131117859
Portfolio beta and capm You are putting together a portfolio made up of four different stockd. However you are considering two possible weightings.
data table asset beta first portfolio second portfolio
A 2.10 8% 42%
B 0.95 8% 42%
C 0.45 42% 8%
D -1.60 42% 8%
A. The beta on the first portfolio is ? round to three decimals
The beta on the second portfolio is ? round to three decimals
B. Which portfolio is riskier
a. The second portfolio because the beta is larger
b. The second portfolio because the beta is smaller
c. The first portfolio because the beta is smaller
d. The first portfolio because the beta is larger
C. If the risk -free rate of interest were 4.5% and the market risk premium were 7.5%, then the rate of return on the first portfolio is expected to be? percent round to two decimals
If the risk-free rate of interest were 4.5% and the market risk premium were 7.5% then the rate of return on the second portfolio is expected to be? percent round to two decimal places.
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