What is the expected rate of return of barry portfolio

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Reference no: EM131566348

Barry Swifter 60 is considering retiring. Barry’s retirement portfolio is currently valued at $750,000 and is allocated in T-Bills, a S&P/TSX Index Fund and a Equity Fund as follows:

Expected Return $ Value

T-Bills 4.5% $75,000

S&P/TSX Index Fund 8.0% $450,000

Equity Fund 12.0% $225,000

a) Based on the current portfolio composition and the expected rates of return, what is the expected rate of return of Barry’s portfolio?

b) If the Equity Fund has a beta of 1.4, what is the beta of Barry’s portfolio?

c) If Barry only wants to invest in T-Bills and the Equity Fund, how much money will he have to invest in each to have a portfolio beta of 1.19?

Reference no: EM131566348

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