QUESTION 1: QUESTION 2: A portfolio is invested 10 percent in Stock G, 50 percent in...

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Question

QUESTION 1:

A portfolio is invested 10 percent in Stock G, 50 percent in Stock J, and 40 percent in Stock K. The expected returns on thes

QUESTION 2:

You own a stock portfolio invested 30 percent in Stock Q, 25 percent in Stock R, 25 percent in Stock S, and 20 percent in Sto

Answer 1

Answer #1

1)

Expected return = Weights*expected return

Expected return = 0.1*0.09 + 0.5*0.15 + 0.4*0.19

Expected return = 0.009 + 0.075 + 0.076

Expected return = 0.16 or 16.00%

2)

Portfolio beta = Weights * beta

Portfolio beta = 0.3*0.8 + 0.25*1.18 + 0.25*1.19 + 0.2*1.36

Portfolio beta = 0.24 + 0.295 + 0.2975 + 0.272

Portfolio beta = 1.10

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Answer 2

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