Suppose Intel stock has a beta of 1.8, whereas Boeing stock has a beta of 1.2. If

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Suppose Intel stock has a beta of 1.8, whereas Boeing stock has a beta of 1.2. If the risk-free interest rate is 5% and the expected return of the market portfolio is 15%, according to the CAPM,

a. What is the expected return of Intel stock?

b. What is the expected return of Boeing stock?

c. What is the beta of a portfolio that consists of 70% Intel stock and 30% Boeing stock?

d. What is the expected return of a portfolio that consists of 60% Intel stock and 40% Boeing stock (show both ways to solve this)?

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Corporate Finance

ISBN: 9780273792024

3rd Global Edition

Authors: Peter Demarzo, Jonathan Berk

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Question Posted: Jun 12, 2024 01:02 AM

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Suppose Intel stock has a beta of 1.8, whereas Boeing stock has a beta of 1.2. If

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Corporate Finance

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