Homework Answers
Required return=risk free rate+beta*(market rate-risk free rate)
Required return for:
X=5+(11-5)*0.8=9.8%
Y=5+(11-5)*1.2=12.2%
Z=5+(11-5)*1.8=15.8%
Portfolio return=Respective return*Respective weight
=(9.8*0.2)+(12.2*0.45)+(15.8*0.35)
=12.98%
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