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Asset W has an expected return of 8.8 percent and a beta of .90. If the risk-free rate is 2.6 percent, complete the following table
Asset W has an expected return of 8.8 percent and a beta of .90. If the risk-free rate is 2.6 percent, complete the following table for portfolios of Asset W and a risk-free asset. What is the slope of the line that results?
Input area: |
Stock E(R) | 8.80% |
Stock beta | 0.90 |
Risk-free return | 2.60% |
(Use cells A6 to B8 from the given information to complete this question.) |
Output area: |
Weight of W | Weight of risk-free | Portfolio E(R) | Portfolio beta |
0% | 100% | ||
25% | 75% | ||
50% | 50% | ||
75% | 25% | ||
100% | 0% | ||
125% | -25% | ||
150% | -50% | ||
Slope of SML |
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