What is the beta of a portfolio with an expected return of 12% if Treasury bills yield 6% and the market risk premium is 8%?
A) 0.50
B) 0.75
C) 0.90
D) 1.50

Question

Quizplus · Accepted Answer

The formula to calculate the beta is:
Beta = (Portfolio's expected return - Risk-free rate) / Market risk premium
Substituting the given values:
Beta = (12% - 6%) / 8% = 0.75
Therefore, the beta of the portfolio is 0.75. Option B is the correct choice.

What Is the Beta of a Portfolio with an Expected