Purchase Solution

Expected return

Not what you're looking for?

Ask Custom Question

What return should be expected from investing in the market portfolio which is expected to yield 18% if the investment includes all of the investor's funds plus 100% of additional funds borrowed at the risk-free rate of 6%?

Purchase this Solution
Solution Summary

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

Solution Preview

Let us start with investor funds as $100. Then another $100 would be borrowed at ...

Purchase this Solution
Free BrainMass Quizzes
Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

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

  • 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.

  • 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?

View More Related Solutions