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A stock has a beta of 1.00 and an expected return of 10 percent. A risk-free asset currently earns 2.2 percent. a. What is the
A stock has a beta of 1.00 and an expected return of 10 percent. A risk-free asset currently earns 2.2 percent. |
a. | What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
b. | If a portfolio of the two assets has a beta of .80, what are the portfolio weights? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) |
c. | If a portfolio of the two assets has an expected return of 8 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 3 decimal places, e.g., 32.161.) |
d. | If a portfolio of the two assets has a beta of 2.00, what are the portfolio weights? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) |
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