Purchase Solution

Expected Return

Not what you're looking for?

Ask Custom Question

Work and explain in excel

Suppose you invested 35,000 in the following four stocks

invested Beta
A 14,000 0.6
B 15,000 1.1
C 16,000 1.3
D 17,000 1.8

Risk free rate is 5 percent and expected return on the market portfolio is 18 percent.
Based on CAPM, what is the expected return on the above portfolio?

Purchase this Solution
Solution Summary

The solution explains how to calculate the expected return on a portfolio

Solution Preview

Please see the attached file.

Stock Amount Beta
A 14,000 0.6
B 15,000 1.1
C 16,000 1.3
D 17,000 1.8
Total Amount 62,000

To find the expected return on a portfolio, we need the ...

Purchase this Solution
Free BrainMass Quizzes
Basics of corporate finance

These questions will test you on your knowledge of finance.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

View More Free Quizzes
Related BrainMass Solutions

  • What does the Beta of a Stock Mean?

    rate)) Expected return on a stock = .05 +(1*(.15-.05)) Expected return on a stock = .05 +.10 Expected return on a stock = .15 The expected return on a stock with a beta=2 will be: Expected return on a stock = Risk-free-rate + (Beta*(Expected

  • Expected Return

    expected annual return on stock 2 = 10% expected annual return on stock 3 = has to be calculated expected annual return on portfolio = 12% Expected return on portfolio = proportion

  • Finance : Expected Return and Risk

    (Expected portfolio return) Musumeci Capital Management has invested its portfolio as shown here. What is Musumeci's expected portfolio return?

  • expected return on a stock with a beta=2.0 twice

    197312 Is the expected return on a stock with a beta=2.0 twice the expected return on a stock with a beta? Is the expected return on a stock with a beta=2.0 twice the expected return on a stock with a beta?

  • Expected Return

    Risk free rate = 6% Beta = 1.25 Expected return on the market = 13% Expected Return using the CAPM equation is Expected return = Risk free rate + (Expected Return on Market-Risk free rate) X beta Expected Return = Rf + (Rm-Rf) X beta Expected

  • Answer to "expected return" question

    The new expected return is Expected Return = 4% + (14.7%-4.9%) X 1.3 Expected Return = 16.74% The solution explains how to calculate the expected return using the CAPM equation

  • expected excess return

    B, it offers an expected excess return of 1.8% 4. B, it offers an expected return of 2,4% 5.

  • Expected rate of return on the portfolio

    expected total return can be calculated as Expected rate of return = Sum (Probability X Return) Expected rate of return = 0.1 X 15% + 0.85 X 12.67% + 0.05 X -2.33% Expected rate of return = 12.15% The solution explains how to calculate the expected

  • Expected Return and Beta Risk

    113625 Expected return / beta 17. The expected return on the market is 13% and the risk-free rate is 5%. Your portfolio has a beta of 1.3. What is the expected return on your portfolio? 18. What is the beta of the following portfolio?

  • Calculating the expected returns

    Calculate the expected return from Dell. b. Find the highest expected return that is offered by one of these stocks. c. Find the lowest expected return that is offered by one of these stocks. d.

View More Related Solutions