
investment portfolio
Adam invests his savings of $10000 and $ 5000 in which he borrows from a bank at 5% interest in a broad portfolio of stocks that approximates the market portfolio. The market return is estimated to be 12% per annum. Assume borrowing and lending rates are equal.
Calculate her expected return using the CAPM equation.
Return = risk free rate + Beta (Market return  risk free rate)
= 5% + 1 (12%  5%)
= 12%
Am i right?

Re: investment portfolio

Re: investment portfolio
thanks , this is the continuation of the question.
What is the expected volatility of adam portfolio if the market portfolio is 18% per annum?