(A) Explain Capital Market Line with suitable diagram and example.
(B) Solve following:
Particulars |
Initial Price |
Market Price (at the end of the year) |
Beta Risk factor |
A |
13 |
19 |
1.25 |
B |
20 |
25 |
1.00 |
C |
24 |
30 |
1.33 |
Risk-free Return may be taken at 10% you are required to calculate.
(i) Expected Rate of Return of Portfolio in each by using CAPM
(ii) Average Returns of Portfolio
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