100%(6)6 out of 6 people found this document helpful
This preview shows page 1 - 2 out of 2 pages.
Leah HaymondFinancial ManagementSeptember 22, 2018PORTFOLIO BETA An individual has $35,000 invested in a stock with a beta of 0.8 and another $40,000 invested in a stock with a beta of 1.4. If these are the only two investments in her portfolio, what is her portfolio’s beta?.8+1.4= 1.12is 13%. What is the required rate of return on a stock with a beta of 0.7?premium is 6%. What is the required return for the overall stock market? What is the required rate of return on a stock with a beta of 1.2?BETA AND REQUIRED RATE OF RETURN A stock has a required return of 11%, the rusk-free rate is 7%, andthe market risk premium 4%.a.What is the stock’s beta?