|
Investment in equity shares |
Initial price |
Dividend |
Market price (end of the year) |
Beta risk factor |
| Cement Ltd |
25 |
2 |
50 |
0.8 |
| Steel Ltd |
35 |
2 |
60 |
0.7 |
| Liquor Ltd |
45 |
2 |
135 |
0.5 |
| Government bonds |
1000 |
140 |
1005 |
0.99 |
Risk-free rate may be 14%
You are required to calculate
a) Expected return using Capital asset pricing model (CAPM)
b) Average return of the portfolio.
9 Comments