1 What is the Beta of a portfolio with an expected return of

1. What is the Beta of a portfolio with an expected return of 12% if Treasury bills yield 6% and the market risk premium is 8%?

A. 0.50

B. 0.75

C. 0.90

D. 1.50

Please show calculations

Solution

expected return=Risk free rate+Market risk premium*Beta

12=6+8*Beta

Beta=(12-6)/8

=0.75