Suppose you have a portfolio that includes two stocks. You invested 60 percent of your total...

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Suppose you have a portfolio thatincludes two stocks. You invested 60 percent of your total fund ina stock that has a Beta equal to 3.0 and the remaining 40 of yourfunds in a stock that has a Beta equal to 0.5. What is thePortfolio Beta?
a)           Stock F has a Beta Coefficient equal to 2. If the Risk-Free Rate ofReturn equals 4 per-
cent and the Expected Market Returnequals 10 percent, what is stock F’s Required Rate of Return?
           A portfolio’s Expected Return is 12%, its Standard Deviation is20%, and the Risk-Free Rate is 4%. Which of the following wouldmake the greatest increase in the Portfolio’s Sharpe
               Ratio?
An increase of 1% in Expected Return.
A decrease of 1% in Risk-Free Rate
A decrease of 1% in its Standard Deviation

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1 Calculation of portfolio beta particulars beta weights weighted beta stock 1 30 060 18 stock 2 05 040 02 TOTAL 20 The portfolio beta equals 20 2 Calculation of required return of stock F formula Required rate of return risk See Answer

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