You hold a portfolio with the following securities: Security Percent
You hold a portfolio with the following securities:
Security
Percent of
Portfolio Beta
Expected
Return
Able Corporation 20% 3.20 36.0%
Baker Corporation 40% 1.60 20.0%
Charlie Corporation 40% .20 6.0%
What is the expected return for the market, according to the CAPM?
A) 12.0% B) 10.0% C) 14.0% D) 13.8%
ANSWER
C
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