CSL, a pharmaceutical company, has a beta of 1.2, and Woolworths has a beta of 0.8. The risk-free rate of interest is 4% and the market risk premium is 7%. What is the expected return on a portfolio with 40% of its money in CSL and the balance in Woolworths?
A) 11.85%
B) 9.91%
C) 10.01%
D) 10.72%
Correct Answer:
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