Use the table for the question(s)below.
Consider the following three individuals portfolios consisting of investments in four stocks:
-Assuming that the risk-free rate is 4% and the expected return on the market is 12%,then required return on Peter's portfolio is closest to:
A)20%
B)22%
C)18%
D)16%

Question

Use the table for the question(s)below.
Consider the following three individuals portfolios consisting of investments in four stocks: 
-Assuming that the risk-free rate is 4% and the expected return on the market is 12%,then required return on Peter's portfolio is closest to:
A)20% 
B)22% 
C)18% 
D)16%

Quizplus · Accepted Answer

C)bp_ortfolio = Σx_ib_i r_i = r_f + b(E[R_Mkt] - r_f) = .04 + 1.8(.12 - .04)= .184 11ea7cce_3d32_869b_928c_97b588e9c4e2_TB1626_00

Use the Table for the Question(s)below