What is the beta of portfolio

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You hold three stocks in your portfolio. Using the information in the table below, answer the following questions.    

 

Weight

Beta

Expected Return

Stock A

30%

1.80

15%

Stock B

20%

1.20

11%

Stock C

50%

0.60

7%

Show your work.

a. What is the beta of your portfolio?  

b. What is the required return of the portfolio using CAPM?  Assume the market return is 11% and the risk-free rate is 2%

c. What is the expected return of the portfolio?

d. Given the information that you have calculated, is the portfolio undervalued or overvalued? Explain.

Reference no: EM133058277

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