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portfolio (weighted average) expected rate of return

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You are considering investing in a portfolio of the common stocks of four publicly-traded companies with betas as follows:

ABC: 0.7

DEF: 0.9

GHI: 1.3

JKL: 1.9

If the risk-free rate is 4% and the market rate is 10%, what is your expected rate of return in:

ABC?
DEF?
GHI?
JKL?

e. If your portfolio is 20% in ABC, 30% in DEF, 30% in GHI, and 20% in JKL, what is your portfolio (weighted average) expected rate of return?

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The portfolio (weighted average) expected rate of return is noted.

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You are considering investing in a portfolio of the common stocks of four publicly-traded companies with betas as follows:

ABC: 0.7

DEF: 0.9

GHI: 1.3

JKL: 1.9 ...

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  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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