Use the Following Data

question 145

Essay

Use the following data:
Market risk premium = 10%
Risk-free rate = 2%
Beta of XYZ stock = 1.6
Beta of PDQ stock = 2.4
Investment in XYZ stock = $15,000
Investment in PDQ stock = $60,000
You have no assets other than your investments in XYZ and PDQ stock.
What is the expected return of your portfolio? Show all work.

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Definitions:

Formal Appraisal

A systematic evaluation process, typically conducted by an organization, to assess an employee's job performance and productivity.

360-degree Feedback

A performance appraisal method where an employee is assessed by feedback collected from their supervisor, peers, subordinates, and sometimes clients.

Performance Objectives

Specific, measurable goals set for individuals or teams to achieve within a specific timeframe to evaluate their performance.

Quantity

The property that can exist as a magnitude or multitude, often measured and used for describing the amount of something.