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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
You have just invested in a portfolio of three stocks. The amount of money that you invested in each stock and its beta are summarized below.
| Stock | Â | Investment | Â | Beta | |
| A | Â | $194,000 | Â | Â | 1.56 |
| B | Â | 291,000 | Â | Â | 0.69 |
| C | Â | 485,000 | Â | Â | 1.34 |
Calculate the beta of the portfolio and use the capital asset pricing model (CAPM) to compute the expected rate of return for the portfolio. Assume that the expected rate of return on the market is 16 percent and that the risk-free rate is 6 percent. (Round beta answer to 3 decimal places, e.g. 52.750 and expected rate of return answer to 2 decimal places, e.g. 52.75%.)
| Beta of the portfolio | Â | ![]() |
 |
| Expected rate of return | Â | ![]() |
% |
Â
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