Risk and Return Illustration 26


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(A) Explain Capital Market Line with suitable diagram and example.

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(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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S’COrE Education is a professional coaching institute to coach for new generation courses. S’COrE has highly experienced faculty with enormous experience and achievement in teaching and industry. We teach each subject in such a manner that even complicated subject feels simple. This helps student to S’COrE-the-Max. Since 1998 S’COrE had university toppers accross courses and subjects. Once you are our student you will also believe S’COrE - the - Best !!

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