JR Has a Three Stock Portfolio A)550%
B)6

question 94

Multiple Choice

J.R. has a three stock portfolio. Details of the portfolio are provided in the table. If the T-bill rate is 5% and the market risk premium is 5.5%. According to the CAPM, what is the expected return of J.R.'s portfolio? $$\begin{array} { | c | c | c | } \hline \text { Stock } & \text { Investment } & \text { Beta } \\\hline \begin{array} { c } \text { Motherlode } \\\text { Mines }\end{array} & \$ 30,000 & 1.6 \\\hline \text { Lewd Lemons } & \$ 40,000 & 1.0 \\\hline \text { Bonanza Beef } & \$ 30,000 & 0.8 \\\hline\end{array}$$

• A)5.50%
• B)6.16%
• C)10.00%
• D)10.50%
• E)11.16%

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