Risk and return

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RISK AND RETURN

ROSE wants to know how much risk she must undertake to generate a good return of her portfolio. The current risk-free return is 5%. The return of overall stock market is 16%. Use the CAPM to calculate how high the beta coefficient of rosemary's portfolio would have to be to achieve each of the following expected portfolio returns.

A) 10%   b) 15% c) 18% d) 20% E) Rose is risk averse what is the highest return she can expect if she is unwilling to take more risk than the average risk?

Note: beta = r- Rf / r m – Rf

Reference no: EM13725240

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