What is the expected return on a security given market risk

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Question 1: According to the CAPM, what is the expected return on a security given a market risk premium of 10%, a stock beta of 1.45, and a risk free interest rate of 1%? Put the answers in decimal place.

Question 2: Consider the CAPM. The risk-free rate is 1% and the expected return on the market is 13%. What is the expected return on a portfolio with a beta of 0.5? (Put answers in decimal points instead of percentage)

Question 3: You have a portfolio consisting of Intel, GE and Con Edison. You put 20% in Intel, 65% in GE and 15% in Con Edison. Intel, GE and Con Edison have betas of 0.71, 1.51 and 0.36 respectively. What is your portfolio beta?

Reference no: EM132658901

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