UPS, a delivery services company, has a beta of 1.6, and Wal-Mart has a beta of 0.9. The risk-free rate of interest is 6% and the market risk premium is 9%
What is the expected return on a portfolio with 40% of its money in UPS and the balance in Wal-Mart?
A) 14.96%
B) 15.79%
C) 16.62%
D) 18.28%
Answer: C
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