Question

You own a portfolio that has 6,000 shares of stock A, which is priced at 15.5...

You own a portfolio that has 6,000 shares of stock A, which is priced at 15.5 dollars per share and has an expected return of 15.37 percent, and 2,000 shares of stock B, which is priced at 20.5 dollars per share and has an expected return of 6.84 percent. The risk-free return is 2.71 percent and inflation is expected to be 1.97 percent. What is the risk premium for your portfolio? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

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Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

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