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Use the Following Information to Answer the Question(s)below

question 87

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Use the following information to answer the question(s) below.
Suppose that all stocks can be grouped into two mutually exclusive portfolios (with each stock appearing in only one portfolio) : growth stocks and value stocks.Assume that these two portfolios are equal in size (market value) ,the correlation of their returns is equal to 0.6,and the portfolios have the following characteristics: Use the following information to answer the question(s) below. Suppose that all stocks can be grouped into two mutually exclusive portfolios (with each stock appearing in only one portfolio) : growth stocks and value stocks.Assume that these two portfolios are equal in size (market value) ,the correlation of their returns is equal to 0.6,and the portfolios have the following characteristics:   The risk-free rate is 3.5%. -The expected return on the market portfolio (which is a 50-50 combination of the value and growth portfolios) is closest to: A) 12.0%. B) 13.5%. C) 15.0%. D) 19.0%. The risk-free rate is 3.5%.
-The expected return on the market portfolio (which is a 50-50 combination of the value and growth portfolios) is closest to:


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System Modeling

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