Question
A stock has a beta of 1.38 and an expected return of 13.6 percent. A risk-free asset currently earns 4.7 percent. A.) If a portfolio
A stock has a beta of 1.38 and an expected return of 13.6 percent. A risk-free asset currently earns 4.7 percent.
A.) If a portfolio of the two assets has an expected return of 12.8 percent, what is its beta?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
B.) If a portfolio of the two assets has a beta of 2.58, what are the portfolio weights?
Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.
A. Beta | |
B. Weight of Stock | |
B. Weight of Risk-Free |
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