UPS, a delivery services company, has a beta of 1.1, and Wal-Mart has a beta of 0.7. The risk-free rate of interest is 4% and the market risk premium is 7%
What is the expected return on a portfolio with 30% of its money in UPS and the balance in Wal-Mart?
A) 9.74%
B) 10.23%
C) 9.25%
D) 9.55%
Answer: A
Business
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