Question
A stock has a beta of 0.9 and an expected return of 9 percent. A risk-free asset currently earns 4 percent. a. What is the
A stock has a beta of 0.9 and an expected return of 9 percent. A risk-free asset currently earns 4 percent. |
a. | What is the expected return on a portfolio that is equally invested in the two assets? (Round your answer to 2 decimal places. Omit the "%" sign in your response.) |
Expected return | % |
b. | If a portfolio of the two assets has a beta of 0.6, what are the portfolio weights?(Round your answers to 2 decimal places. Omit the "%" sign in your response.) |
Weight | |
xS | % |
xrf | % |
c. | If a portfolio of the two assets has an expected return of 8 percent, what is its beta? (Round your answer to 2 decimal places.) |
Beta |
d. | If a portfolio of the two assets has a beta of 2.70, what are the portfolio weights? (Negative amounts should be indicated by a minus sign. Omit the "%" sign in your response.) |
Weight | |
xS | % |
xrf | % |
rev: 11_19_2012 |
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