Search Textbook Sokitio, G What must be the beta- x x , C O ezto.mheducation.com

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Search Textbook Sokitio, G What must be the beta- x x , C O ezto.mheducation.com/hm.tpa Apps ?l Managed bookmar Cards Lase-ship ks 11 1A Favorites -Office Depot e Corporate Essentials-. Fedex- Business Bodie, Essentials of Invesments, 10e-Prebuilt Instructor Course: Bodie, Essentials of Investments, 10e Prebuilt Instructor Course apter 7 Homework Question 9 (of 10 10.00 points what must be the beta of a portfolio with E(rp)-1 1.80%, if,-6% and E(m) 10%? (Round your answer to 2 decimal pl Beta of portfolio References eBook & Resources Worksheet Learming Objective: 07-02 Construct and use the security market line

Explanation / Answer

Beta of Protfolio is 1.45 Explanation: Expected return formula under CAPM E(rp) = rf + beta (E(rm)-rf) E(rp) = Expected portfolio return E(rm) = Expected market return rf = risk free return 0.118 = 0.06 + beta(0.10-0.06) 0.118-0.06 = beta (0.04) 0.058 = beta (0.04) beta = 0.058/0.04 beta = 1.45

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