Suppose Tesla stock has a beta of 2.16 and Walmart stock has a beta of 0.69. If the risk-free rate of return is 4% and the expected return of the market is 10%, what is the expected return of a portfolio that consists of 60% Tesla and 40% Walmart according to the CAPM

13.432%

Explanation:

The computation of the expected rate of return using the CAPM model is shown below:

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

where ,

Beta is

= 2.16 × 0.60 + 0.69 × 0.40

= 1.296 + 0.276

= 1.572

Now placing the other items values

So,

= 4% + 1.572 × (10% - 4)

= 4% + 1.572 × 6%

= 4% + 9.432%

= 13.432%

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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