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7 . A stock has a beta of 1 . 0 5 and an expected return of 1 1 . 3 % . A risk

7. A stock has a beta of 1.05 and an expected return of 11.3%. A risk-less asset is currently earning 3.5%.
a. What is the expected return on a portfolio that is equally invested in the two assets?
b. If a portfolio of the two assets has a beta of 0.5, what are the portfolio weights?
c. If a portfolio of the two assets has an expected return of 10.2%, what is its beta?
d. If a portfolio of the two assets has a beta of 2.14, what are the portfolio weights? How do you interpret the weights for the two assets in this case?

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