If Treasury bills yield 6.0% and the market risk premium is 9.0%,then a portfolio with a beta of 1.5 would be expected to yield:

Question

Quizplus · Accepted Answer

The formula for calculating the expected rate of return on a portfolio is as follows:

Expected Rate of Return = Risk-free Rate + Beta x Market Risk Premium

Substituting the given values, we get:

Expected Rate of Return = 6.0% + 1.5 x 9.0% = 6.0% + 13.5% = 19.5%

Therefore, the correct answer is C) 19.5%.

If Treasury Bills Yield 6