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Asset W has an expected return of 12.0 percent and a beta of 1.1. If the risk-free rate is 4 percent, complete the following table
Asset W has an expected return of 12.0 percent and a beta of 1.1. If the risk-free rate is 4 percent, complete the following table portfolios of Asset W and a risk-free asset. Illustrate the relationship between portfolio expected return and portfolio beta by plotting the expected returns ageist the betas. What is the slope of the line that results. | |||||||||||||||||||||
Percentage of Portfolio in Asset W | Portfolio Expected Return | Portfolio Beta | |||||||||||||||||||
0% | |||||||||||||||||||||
25% | |||||||||||||||||||||
50% | |||||||||||||||||||||
75% | |||||||||||||||||||||
100% | |||||||||||||||||||||
125% | |||||||||||||||||||||
150% |
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