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What is the required return of portfolio

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Reference no: EM132789428

The beta of Pant Companies is 0.8, and the beta of Pizarro Corporation is 1.4. The 10-year risk-free rate is 3% and the expected market risk premium is 7%.

a. What is the beta of a portfolio made up of 40% Pant Companies and 60% Pizarro?

b. What is the required return of this portfolio?

Security analysts are projecting an expected return on this portfolio of 11.5% with a standard deviation of 3.5%.

c. What is the probability that this portfolio is currently overvalued?

d. What is the probability that this portfolio is currently undervalued?

Reference no: EM132789428

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