Potash Corp Stock Has a Beta of 1

question 30

Multiple Choice

Potash Corp stock has a beta of 1.2,while Tim Horton's stock has a beta of 1.7.If the risk-free rate is 2.2%,and the market risk premium is 7%,what is the expected return on a portfolio with 40% weight in Potash and the remainder in Tim Horton's?

• A)9.4%
• B)12.7%
• C)10.5%
• D)11.6%
• E)13.25%

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