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) 10%
B) 12%
C) 9%
D) 8%

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) 10% 
B) 12% 
C) 9% 
D) 8%

Quizplus · Accepted Answer

C) βp_ortfolio = Σx_ib_i r_i = r_f + b(E[R_Mkt] - r_f) = .04 + .65(.12 - .04) = .092 11ea7e5a_6e74_3f68_9a0a_096d09e9a514_TB1623_00

Use the Table for the Question(s) Below