Google Answers: Investments - beta and expected return on portfolio

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Q: Investments - beta and expected return on portfolio ( No Answer, 0 Comments )

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Subject: Investments - beta and expected return on portfolio
Category: Business and Money > Finance
Asked by: snowbear-ga
List Price: $5.00

Posted: 06 Aug 2003 18:37 PDT
Expires: 08 Aug 2003 18:15 PDT
Question ID: 240923

You are investing $200 million on behalf of a client.  You construct a
borrowing portfolio for them, which involves borrowing $500,000 at the
riskfree rate and investing in a stock portfolio with a beta of 1.05.
The riskfree rate is 2% per annum and the risk premium on the market
portfolio is 8.5% per annum.
a. What is the beta of your overall portfolio? 
b. What is the expected return per annum on your overall portfolio?

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