19 - Consider a well-diversified portfolio, A, in a two-factor economy. The risk-free rate is 6%, the risk premium on th first factor portfolio is 4%, and the risk premium on the second factor portfolio is 3%. If portfolio A has a beta ot 1.2 on the first factor and 0.4 on the second factor, what is its expected return? a) 8.0% b) 13.2% 12.0% d) 7.0% o1383176 9.2%

19 - Consider a well-diversified portfolio, A, in a two-factor economy. The risk-free rate is 6%, the risk premium on th first factor portfolio is 4%, and the risk premium on the second factor portfolio is 3%. If portfolio A has a beta ot 1.2 on the first factor and 0.4 on the second factor, what is its expected return? a) 8.0% b) 13.2% 12.0% d) 7.0% o1383176 9.2%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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