A stock has a beta of 1.24,an expected return of 13.68 per cent,and lies on the security market line.A risk-free asset is yielding 2.8 per cent.You want to create a $6,000 portfolio consisting of Stock A and the risk-free security such that the portfolio beta is 0.65.What rate of return should you expect to earn on your portfolio?
A)9.56 per cent
B)8.50 per cent
C)9.16 per cent
D)9.33 per cent
E)9.41 per cent

Question

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The Answer of A stock has a beta of 1.24,an expected return of 13.68 per cent,and lies on the security market line.A risk-free asset is yielding 2.8 per cent.You want to create a $6,000 portfolio consisting of Stock A and the risk-free security such that the portfolio beta is 0.65.What rate of return should you expect to earn on your portfolio?
A)9.56 per cent
B)8.50 per cent
C)9.16 per cent
D)9.33 per cent
E)9.41 per cent

A Stock Has a Beta of 1