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Homework answers / question archive / Calculating the beta of a portfolio that mixes the risk-free asset and the market portfolio, using the security market line (SML) 6

Calculating the beta of a portfolio that mixes the risk-free asset and the market portfolio, using the security market line (SML) 6

Finance

Calculating the beta of a portfolio that mixes the risk-free asset and the market portfolio, using the security market line (SML) 6.2% What is the beta of a portfolio with an expected return 10.5% if the T-bill yield is and the market risk premium is 8.3% T-bill rate= 6.2% Market risk premium= 8.3% E(Rp)= 10.5% Portfolio beta-

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note-You may have to use absolute referance (as per the excel) for formula.. answer will be 0.52

       
       
T-bill rate 6.20%    
Market risk premium 8.30%    
E(rp) 10.50%    
       
Portflolio beta=         0.52 =(10.5%-6.2%)/8.3%

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