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
