A stock has a beta of 1.34 and an expected return of 13.2 percent. A risk-free asset currently earns 4.5 percent.

a. What is the expected return on a portfolio that is equally invested in the two assets?

b. If a portfolio of the two assets has a beta of .94, what are the portfolio weights?

c. If a portfolio of the two assets has an expected return of 12.4 percent, what is its beta?

d. If a portfolio of the two assets has a beta of 2.54, what are the portfolio weights?

\begin{tabular}{|l|r|r|} \hline a. Expected return & 8.85 & % \\ \hline b. Weight of stock & & \\ \hline \multicolumn{1}{|c|}{ Weight of risk-free asset } & & \\ \hline c. Beta & & \\ \hline d. Weight of stock & & \\ \hline Weight of risk-free & & \\ \hline \end{tabular}