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 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 ) b If a portfolio of the two assets has a beta of 98, what are the portfolio weights (Do not round intermediate calculations and round your answers to 4 decimal places, e g , 1616 ) c If a portfolio of the two assets has an expected return of 12 8 percent, what is its beta (Do not round intermediate calculations and round your answer to 2 decimal places, e g , 32 16 ) d If a portfolio of the two assets has a beta of 2 58, what are the portfolio weights (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 )

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  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 ) b  If a portfolio of the two assets has a beta of  98, what are the portfolio weights  (Do not round intermediate calculations and round your answers to 4 decimal places, e g ,  1616 ) c  If a portfolio of the two assets has an expected return of 12 8 percent, what is its beta  (Do not round intermediate calculations and round your answer to 2 decimal places, e g , 32 16 ) d  If a portfolio of the two assets has a beta of 2 58, what are the portfolio weights  (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 )

Accepted Answer

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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.)
b.	If a portfolio of the two assets has a beta of .98, what are the portfolio weights? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.)
c.	If a portfolio of the two assets has an expected return of 12.8 percent, what is its beta? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
d.	If a portfolio of the two assets has a beta of 2.58, what are the portfolio weights? (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.)

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. What is the

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