Lily33
Jan 21, 2011, 10:23 AM
Hi,everyone. I'm junoir here
I've a problem question about portfolio require return..
In here, can I please any expert to solve my problem?
Question:
A money manager holds the following portfolio
Stock Amount Invested Beta (β)
1 300K 0.6
2 300K 1.0
3 500K 1.4
4 500K 1.8
Risk-free rate is 6% at the portfolio's required rate of return is 12.5%. The manager would like to sell all of her holdings of stock 1 and use the proceeds to purchase more share of stock 4. What would be the portfolio's required rate of return following this change?
I've a problem question about portfolio require return..
In here, can I please any expert to solve my problem?
Question:
A money manager holds the following portfolio
Stock Amount Invested Beta (β)
1 300K 0.6
2 300K 1.0
3 500K 1.4
4 500K 1.8
Risk-free rate is 6% at the portfolio's required rate of return is 12.5%. The manager would like to sell all of her holdings of stock 1 and use the proceeds to purchase more share of stock 4. What would be the portfolio's required rate of return following this change?