Question
A stock has a beta of 1.0 and an expected return of 20 percent. A risk-free asset currently earns 5.1 percent. a. What is the
A stock has a beta of 1.0 and an expected return of 20 percent. A risk-free asset currently earns 5.1 percent. |
a. | What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) |
Expected return | % |
b. | If a portfolio of the two assets has a beta of .41, what are the portfolio weights? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) |
Portfolio Weight | |
xS | % |
xrf | % |
c. | If a portfolio of the two assets has an expected return of 10.75 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 4 decimal places.) |
Beta |
d. | If a portfolio of the two assets has a beta of 1.18, what are the portfolio weights? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) |
Portfolio Weight | |
xS | % |
xrf | % |
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