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(Solved): The Risk-free Return Is 5.88 And The Market Return Is 17.78. What Is The Expected Return For The Fol ...


The risk-free return is 5.88 and the market return is 17.78. What is the expected return for the following portfolio? (State
The risk-free return is 5.88 and the market return is 17.78. What is the expected return for the following portfolio? (State your answer in percent with two decimal places.) Stock Beta Investment AAA 3.8 $800,000 BB3 2.8 $1,000,000 CCC 1.7 $1,400,000 DDD 0.6 $1,300,000 23.80% O 29.60% 41.20% 35.40% 20.00%

Expert Answer


B.29.60% first let us know the expected return using CAPM: => risk free rate + beta*(market return - risk free rate) stock expect
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