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A stock has a beta of 1.28 and an expected return of 12.6 percent. A risk-free asset currently earns 4.2 percent. Required: (a) What is

A stock has a beta of 1.28 and an expected return of 12.6 percent. A risk-free asset currently earns 4.2 percent.

Required:
(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 percentage rounded to 2 decimal places (e.g., 32.16).)

Expected return %

(b)

If a portfolio of the two assets has a beta of 0.88, what are the portfolio weights? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).)

Weight of the stock
Weight of the risk-free asset

(c)

If a portfolio of the two assets has an expected return of 11.8 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Beta

(d)

If a portfolio of the two assets has a beta of 2.48, what are the portfolio weights? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).)

Weight of the stock
Weight of the risk-free asset

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