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:

Standard Form

A way of presenting logical arguments with all premises listed first, followed by the conclusion, often used to clarify logical structure.

Categorical Propositions

Statements that assert or deny that all or some of the members of one category are included in another.

Copula

A linking verb in a sentence, often a form of "to be", connecting the subject to a subject complement.

Non-categorical

Pertains to statements or propositions that do not fit neatly into predefined categories or classifications.