Question
A stock has a beta of 1.3 and an expected return of 18% and another asset currently earns 5%. a) What is the expected return
A stock has a beta of 1.3 and an expected return of 18% and another asset currently earns 5%.
a) What is the expected return on a portfolio that is invested 60% in the stock and 40% in the other asset?
b) If a portfolio of the two assets has an expected return of 5%, what's the beta?
c) If a portfolio of the two assets has a beta of 0.65, what are the portfolio weights?
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk
11th Edition
0324422865, 978-0324422863
