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A stock has a beta of 1.25 and an expected return of 15 percent. A risk-free asset currently earns 3.2 percent. a. What is the
A stock has a beta of 1.25 and an expected return of 15 percent. A risk-free asset currently earns 3.2 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.) not round intermediate calculations and round your answers to 4 decimal places, e.g,.1616.) (Do not round intermediate calculations. Round your answer to 3 decimal places, e.g., 32.161.) 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.) b. If a portfolio of the two assets has a beta of .75, what are the portfolio weights? (Do c. If a portfolio of the two assets has an expected return of 9 percent, what is its beta? d. If a portfolio of the two assets has a beta of 2.50, what are the portfolio weights? (A a. Expected return b. Weight of stock 9.101% 0.6000 0.4000 Weight of risk-free Portfolio beta Weight of stock Weight of risk-free c. d. 2
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