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Expected return of a portfolio using beta. The beta of four stocks - P, Q, R, and S - are 0.62, 0.91, 1.18, and 1.35,
Expected return of a portfolio using beta. The beta of four stocks - P, Q, R, and S - are 0.62, 0.91, 1.18, and 1.35, respectively and the beta of portfolio 1 is 1.02, the beta of portfolio 2 is 0.92, and the beta of portfolio 3 is 1.12. What are the expected returns of each of the four individual assets and the three portfolios if the current SML is plotted with an intercept of 3, 5% (risk-free rate) and a market premium of 11.0% (slope of the line)? What is the expected return of stock P? % (Round to two decimal places.)
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