CFA Practice Question

There are 119 practice questions for this study session.

CFA Practice Question

Consider a well-diversified portfolio, A, in a two-factor economy. The risk-free rate is 6%, the risk premium on the first factor portfolio is 4%, and the risk premium on the second factor portfolio is 3%. If portfolio A has a beta of 1.2 on the first factor and .8 on the second factor, what is its expected return?

A. 8.0%
B. 10.3%
C. 13.2%
Correct Answer: C

User Contributed Comments 1

User Comment
rt2007 6 + 1.2*4 + 0.8*3 = 13.2
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