The capital asset pricing model

Reference no: EM1359714

Suppose that the stock of the new cologne manufacturer, Eau de Rodman, Inc., has been forecast to have a return with standard deviation .30 and a correlation with the market portfolio of .9. If the standard deviation of the yield on the market is .20, determine the relative holdings of the market portfolio and Eau de Rodman stock to form a portfolio with a beta of 1.8.

Reference no: EM1359714

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