CSL, a pharmaceutical company, has a beta of 1.1, and Woolworths has a beta of 1.0. The risk-freerate of interest is 4% and the market risk premium is 6%. What is the expected return on a portfolio with 50% of its money in CSL and the balance in Woolworths?
A) 11.1%
B) 12.4%
C) 10.3%
D) 9.9%
Correct Answer:
Verified
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