Portfolio Essay Examples

Finance

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portfolio of risky securities, where returns are equal to the risk-free rate (Bali, Brown & Caglayan, 2012). There is another possibility of a negative beta, and in which case, the return is less than the risk-free rate. 13. Expected return on the stock = risk-free rate + (expected return on the market – risk free rate)8beta = 0.036 + 1.23(0.109-0.036) = 12.579% The expected return = 12.58% 14. Expected return on the stock = risk-free rate + (expected return on the market – risk free rate)*beta 0.114 = 0.037 + (0.071-0.37)Bi0.114 = 0.037 +0.034Bi Bi = 2.26 15. Expected return on the stock = risk-free rate + (expected return on the market – risk free rate)*beta...