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An equity has a beta of 1.35 and an expected return of 16 percent. A risk-free asset currently earns 4 percent. You form a portfolio

An equity has a beta of 1.35 and an expected return of 16 percent. A risk-free asset currently earns 4 percent. You form a portfolio based on these two assets. a. If a portfolio of the two assets has a beta of 0.95, what are the portfolio weights? b. If a portfolio of the two assets has an expected return of 10 percent, what is its beta?

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