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The portfolio beta is.89 & the expected return is 15.01%.




Stock Allocation Beta Std Deviation;Smith & T 35% 0.90 43%;Arthur Trust 20% 1.60 47%;Galaxy Corp 15% 1.12 50%;Transfer Fuels 30% 0.30 54%;The portfolio beta is.89 & the expected return is 15.01%.;It is recommended replacing Smith & T shares with the same amount of additional shares of Transfer Fuels.;The risk free rate is 7% & the market risk premium is 9%.;Assuming that the market is in equilibrium, how much will the required return change?;2.14%;2.31%;1.45%;1.86%;The analyst expects a return of 11.65% from the portfolio with the new weights.;Based on the changes to the portfolio is it;Fairly valued;Overvalued;Undervalued


Paper#34306 | Written in 18-Jul-2015

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