Homework Answers
Share of Stock A = Investment in Stock A/Total Investment
= 150*45.50/(150*45.50 +200*50.30)
= 40.42%
B = 100-40.42% = 59.58%
20.CAPM Return = risk free rate + beta*(Market return – risk free return)
= 2.97% + 1.53*(11.2%-2.97%)
= 15.5619%
Actual return = 15.43%
Underperformed
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