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What is the new portfolio return

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Question - You have a portfolio of $10,000 with a return of 12%. You are planning to sell one stock, currently worth $2,000 with a beta of 0.8 and replace it with $2,000 of a stock with a beta of 2.1. The risk free rate is 5% and the market risk premium is 8%. What is the new portfolio's return?

A. 14.08%

B. 12%

C. 13.56%

D. 15.63%

E. 18.41%

Reference no: EM132895108

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