You hold a well-diversified portfolio of commons shares that has an expected return of 12%, a beta of 1.2, and a totalvalue of P900. You plan to increase your portfolio by buying 10 shares of HLCM at P10 a share. HLCM has anexpected return of 20% with a beta of 2.0.1. What will be the beta of your portfolio after the purchase the new stock?а.2.50b.1.28С.1.19d.1.102. The expected return of the portfolio after the purchase the new stock isа.15.0%b.12.8%C.11.1%d.10.2% An investor is forming a portfolio by investing P25,000 in stock A that has a beta of 1.50, and P25,000 in stock B that hasa beta of 0.80. The return on the market is equal to 6 percent and Treasury bonds have a yield of 4 percent. Whatis the required rate of return on the investor's portfolio?a.6.3%b.6.8%С.7.8%d.8.0%

The total value of portfolio = P 900 Beta of current portfolio = 1.2 Expected return of current…

Answered: You hold a well-diversified portfolio…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 20P

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