7. 17.

Using the SML [LO 13.4] Asset W has an expected return of 11.8 per cent and a beta of 1.10. If the risk-free rate is 3.3 per cent, complete the following table for portfolios of Asset W and a risk-free asset.

Illustrate the relationship between portfolio expected return and portfolio beta by populating the table below with the expected returns against the betas. What is the slope of the line that results?

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Percentage of portfolio Portfolio in Asset W Portfolio expected return beta 25 25 50 75 100 10 125 150 0%