Question
Asset W has an expected return of 12.4 percent and a beta of 2.05. If the risk-free rate is 4.2 percent, complete the following table
Asset W has an expected return of 12.4 percent and a beta of 2.05. If the risk-free rate is 4.2 percent, complete the following table for portfolios of Asset W and a risk-free asset. (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Enter your expected returns as a percent rounded to 2 decimal places, e.g., 32.16, and your beta answers to 3 decimal places, e.g., 32.161.) |
Percentage of Portfolio in Asset W | Portfolio Expected Return | Portfolio Beta | |||
0 | % | % | |||
25 | % | ||||
50 | % | ||||
75 | % | ||||
100 | % | ||||
125 | % | ||||
150 | % | ||||
If you plot the relationship between portfolio expected return and portfolio beta, what is the slope of the line that results? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Slope of the line | % |
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