HaymondCaseAnalysisUnit6.docx - Leah Haymond Financial Management PORTFOLIO BETA An individual has $35,000 invested in a stock with a beta of 0.8 and

HaymondCaseAnalysisUnit6.docx - Leah Haymond Financial...

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Leah Haymond Financial Management September 22, 2018 PORTFOLIO 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= 1.12 is 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?
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