Posted: September 21st, 2016
Stock A has a beta of 1.15 and a standard deviation of return of 35%. Stock B has a beta of 2.50 and a standard deviation of return of 48%.
Stock A has a beta of 1.15 and a standard deviation of return of 35%. Stock B has a beta of 2.50 and a standard deviation of return of 48%. Assume that you form a portfolio that is 60% invested in Stock A and 40% invested in Stock B. Using the information in question 1, according to CAPM, what is the expected rate of return on your portfolio?
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