An investor currently holds the following portfolio: Amount Invested 8,000 shares of Stock A $16,000 Beta = 1.3 15,000 shares of Stock B $48,000 Beta 1.8 25,000 shares of Stock C $96,000 Beta 2.2 If the risk-free rate of return is 0.060 and the market risk premium is 0.042, then the required return on the portfolio is Instruction: Type your answer as a decimal, and round to three decimal places. E.g., if your answer is 0.0106465 or 1.06465%, should type ONLY the number .011, neither 0.0106465, 0.0106, nor 1.065. Otherwise, Blackboard will treat it as a wrong answer.

Consider the following simplified APT model: Factor Expected Risk Premium Market 6.4% Interest Rate -0.6% Yield Spread 5.1%   Factor Risk Exposures   Market Interest Rate Yield Spread Stock Stock(b1) (b2) (b3) P 1.0 -2.0 -0.2 P2 1.2 0 0.3 P3 0.3 0.5 1.0   Required: 1. Calculate the expected return for the above stocks. Assume risk free rate is 5%. Consider a portfolio with equal investments in stocks P, P2 and P3   2.What are the factor risk exposures for the portfolio?    3.What is the portfolio’s expected return?

Consider the following simplified APT model: Factor                                                  Expected Risk Premium Market                                                6.4% Interest Rate                                       -0.6% Yield Spread                                        5.1%                                                        Factor Risk Exposures                                     Market               Interest Rate             Yield Spread Stock                          Stock (b1)                  (b2)                             (b3) P                                    1.0                           -2.0                             -0.2 P2                                  1.2                            0                                 0.3 P3                                  0.3                            0.5                              1.0 a) Calculate the expected return for the above stocks. Assume risk free rate is 5%. Consider a portfolio with equal…

You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta А $250,000 1.25 B 200,000 1.70 с 400,000 0.85 D 150,000 -0.25 Total investment $1,000,000 The market's required return is 10% and the risk-free rate is 3%. What is the portfolio's required return? Do not round intermediate calculations. Round your answer to three decimal places. %