Question
Asset W has an expected return of 11.6 percent and a beta of 1.3. If the risk-free rate is 3.8 percent, complete the following table
Asset W has an expected return of 11.6 percent and a beta of 1.3. If the risk-free rate is 3.8 percent, complete the following table for portfolios of Asset W and a risk-free asset.If you plot the relationship between portfolio expected return and portfolio beta, what is the slope of the line that results?
I have
bp=xw(1.30+(1-xw)(0)=1.3xw
e(rw)=.116=.038+mrp(1.3)
mrp+ .078/1.3= .060 or 6%
E(rp)=.078=6bp
This is where I am stuck trying to fill in this the amount of Portfolio Expected Return and Portfolio Beta for the below percentages.
Percentage of Portfolio
in Asset W
0 %
25
50
75
100
125
150
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