Explore BrainMass

Explore BrainMass

    Expected return on portfolio

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I need to see intermediate steps and forumulas.

    Beta and CAPM
    Suppose the risk free rate is 6.3% and the market portfolio has an expected return of 14.8%. The market portfolio has a variance of .0498. Portfolio Z has a correlation coefficient with the market of .45 and a variance of .1783. According to CAPM, what is the expected return on portfolio Z?

    © BrainMass Inc. brainmass.com March 4, 2021, 8:15 pm ad1c9bdddf

    Solution Preview

    In order to calculate the expected return on portfolio Z, we need to calculate the beta of the portfolio.
    The formula to calculate the beta ...

    Solution Summary

    The solution explains how to determine the expected return on portfolio.