A Portfolio invest in risk-free asset and the market portfolios has an expected return of...

80.2K

Verified Solution

Question

Finance

A Portfolio invest in risk-free asset and the market portfolios has an expected return of 7 % and a standard deviation of 10%. Suppose the risk-free rate is 4%, and standard deviation on the market portfolio is 22 %. According to the CAPM, what expected rate of return would a security earn if it had a 0.55 beta?

Can you show step by step please not on excel

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students