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Asset W has an expected return of 8.9% and a beta of 1.50. If the risk free rate is 2.1%, complete the following table for
Asset W has an expected return of 8.9% and a beta of 1.50. If the risk free rate is 2.1%, complete the following table for portfolios of Asset W and a risk free asset. Illustrate the relationship between the portfolio expected return and portfolio beta by plotting the expected returns against the betas. What is the slope of the line that results?
Percentage of Porfolio in Asset W | Portfolio Expected Return | Portfolio Beta |
0%
| ||
25%
| ||
50% | ||
75% | ||
100% | ||
125% |
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