WebThe market's required rate of return is 13.25%, the risk- free rate is 7.00%, and the Fund's assets are as follows: Stock A B С D Investment $ 200,000 300,000 500,000 $1,000,000 Beta 1.50 - 0.50 1.25 0.75 This problem has been solved! You'll get a detailed solution from a subject matter expert that helps you learn core concepts. See Answer WebThe rate of return of the three securities is 8.5%, 5.0%, and 6.5%. Given, Total portfolio = $3 million + $4 million + $3 million = $10 million r A = 8.5% r B = 5.0% r C = 6.5% In below-given table is the data for the calculation of Expected Return.
Rate of Return Calculator
WebApr 14, 2024 · The total value of our portfolio is $100,000, and we have already calculated each stock’s rate of return. Stock A – $25,000 . Rate of return = 10%; Weight = 25%; Stock B – $10,000 . Rate of return = 15%; Weight = 10%; Stock C – $30,000 . Rate of return = 4%; Weight = 30%; Stock D – $15,000 . Rate of return = 5%; Weight = 15%; Stock E ... WebSep 29, 2024 · The CAPM formula is: r a = r rf + B a (r m -r rf) where: r rf = the rate of return for a risk-free security r m = the broad market 's expected rate of return B a = beta of the asset CAPM can be best explained by looking at an example. Assume the following for Asset XYZ: r rf = 3% r m = 10% B a = 0.75 gildan socks low cut
What is CAPM - Capital Asset Pricing Model - Formula, Example
WebNow that we have the return and weight of each investment, we need to multiply these numbers. For real estate, we will multiply .56 by 10% to get 5.6%. Following this formula for stocks and bonds, we get 2.88% and .12%, respectively. If you add each of these percentages together, the overall portfolio return is 8.6%. WebThe current risk-free rate is 6 percent. Assume that you receive another $200,000. If you invest the money in a stock that has a beta of 0.6, what will be the required return on your $1.2 million portfolio? Question: You have been managing a $1 million portfolio. The portfolio has a beta of 1.6 and a required rate of return of 14 percent. WebPortfolio return Answer: a 8. An investor is forming a portfolio by investing $50,000 in stock A that return on the market is equal to 6 percent and Treasury bonds have a yield of 4 percent. What is the required rate of return on the investor’s portfolio? a. 6.6% b. 6.8% c. 5.8% d. 7.0% e. 7.5% Portfolio return Answer: b 9. gildan smart basics sweatshirt