Portfolio Beta and Required Return You hold the positions in the table below. A) What is...

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Portfolio Beta and Required Return You hold the positions in thetable below. A) What is the beta of your portfolio? B) If youexpect the market to earn 14 percent and the risk-free rate is 3.0percent, what is the required return of the portfolio?
Company                           Price                                    Shares                                 Beta
Texas, Inc.                         $30.00                                200                                      2.8
Dollar Earned Stores       $20.00                                600                                      2.2
Atomic, Inc.                      $70.00                                400                                      1.4
Big Truck Corp                 $40.00                                100                                      -0.6
This problem can be solved two different and equivalent ways.Both ways require the weights of the stocks in the portfolio. Inone method, compute the required return for each stock and then usethe weights to form the portfolio required return.
The other method uses the weights to compute the portfolio beta.This portfolio beta is used to compute the portfolio requiredreturn.

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Total Value of a stock is calculated using the formula The total value of a stock Price Shares Therefore Total value of Texas Inc 30200 6000 Similarly Total value of other stocks are mentioned in the below table Company Price Share Value PriceShare Texas 30 See Answer

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Portfolio Beta and Required Return You hold the positions in thetable below. A) What is the beta of your portfolio? B) If youexpect the market to earn 14 percent and the risk-free rate is 3.0percent, what is the required return of the portfolio?Company Price Shares BetaTexas, Inc. $30.00 200 2.8Dollar Earned Stores $20.00 600 2.2Atomic, Inc. $70.00 400 1.4Big Truck Corp $40.00 100 -0.6This problem can be solved two different and equivalent ways.Both ways require the weights of the stocks in the portfolio. Inone method, compute the required return for each stock and then usethe weights to form the portfolio required return.The other method uses the weights to compute the portfolio beta.This portfolio beta is used to compute the portfolio requiredreturn.