Question
A stock has a beta of 1.55 and an expected return of 15 percent. A risk-free asset currently earns 2.2 percent. a. What is the
A stock has a beta of 1.55 and an expected return of 15 percent. A risk-free asset currently earns 2.2 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (Round your answer to 2 decimal places. (e.g., 32.16)) Expected return % b. If a portfolio of the two assets has a beta of 0.93, what are the portfolio weights? (Round your answer to 4 decimal places. (e.g., 32.1616)) Weight of stock Risk-free weight c. If a portfolio of the two assets has an expected return of 8 percent, what is its beta? (Do not round intermediate calculations and round your answer to 3 decimal places. (e.g., 32.161)) Beta d. If a portfolio of the two assets has a beta of 3.10, what are the portfolio weights? (Negative amount should be indicated by a minus sign.) Weight of stock Risk-free weight
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