Problem:
Use the following for these 2 questions:
Asset -Amount invested -Asset's Expected Return- Asset's Beta
A 2000 13% 1
B 3000 9% .5
C 5000 17% 1.5
Required:
Question 1: Based on the allocation of dollars among the 3 assets and their expected returns, what is your portfolio's expected return?
Question 2: Based on the allocation of dollars among the 3 assets and their betas, what is your potfolio's beta (NOTE: Portfolio beta is the weighted average of the asset's betas)? Please present complete computation and also provide full description.