You Hold the Positions in the Following Table A)1237 Percent
B)9

question 60

Multiple Choice

You hold the positions in the following table. What is the beta of your portfolio? If you expect the market to earn 10 percent and the risk-free rate is 4 percent, what is the required return of the portfolio? $$\begin{array} { | l | l | l | l | } \hline & \text { Price } & \text { Shares } & \text { Beta } \\\hline \begin{array} { l } \text { Advanced Micro } \\\text { Devices }\end{array} & \$ 10 & 200 & 4.2 \\\hline \text { FedEx Corp } & \$ 100 & 50 & 1.1 \\\hline \text { Microsoft } & \$ 30 & 150 & 0.7 \\\hline \text { Sara Lee Corp } & \$ 15 & 200 & 0.5 \\\hline\end{array}$$

• A)12.37 percent
• B)9.73 percent
• C)10.17 percent
• D)11.68 percent

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Definitions:

Liability

A legal obligation or responsibility; it can refer to financial debt or other forms of legal responsibilities individuals or entities may have towards others.

Guarantee

A legal promise to ensure the fulfillment of an obligation or repayment of a loan in case the original party fails to do so.

Terminate

Refers to the action of bringing something or an agreement to an end before its natural conclusion.

Cancellation

The act of crossing out a writing. The operation of destroying a written instrument.