Google Answers: Expected rate of return

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Q: Expected rate of return ( No Answer, 0 Comments )

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Subject: Expected rate of return
Category: Business and Money > Finance
Asked by: hottiemay-ga
List Price: $2.00

Posted: 22 Jan 2006 12:04 PST
Expires: 21 Feb 2006 12:04 PST
Question ID: 436519

A portfolio that combines the risk-free asset and the market portfolio
has an expected return on 25% adn a standard deviation of 4%. Teh risk
free rate is 5%, and the expected return on the market portfolio is
20%. Assume the capital-asset-pricing model holds. What expected rate
fo return would a security earn if it has a 0.5 correlation with the
market portfolio and a standard deviation of 2%.

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