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What is expected return and standard deviation of portfolio

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Reference no: EM132690306

Question 1) You form a portfolio with 60% of your investment in company 1 and remaining 40% in company 2. What is the expected return and standard deviation of the portfolio?

Question 2) The treasury bill rate is 3% and the market portfolio return is expected to be 12.5%.

Required

(A)What is the market risk premium?
(B)What is the required rate of return on an investment that has a beta of 1.8?
(C)If the required rate of return on an investment is 12 percent, what is its beta?
(D)If an investment with a beta of 1.2 is expected to give a return of 14%, would you accept it?

Reference no: EM132690306

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