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final answer round to the two decimal places only E and F The Stock A has a beta of 1.49 and an expected return of

image text in transcribedfinal answer round to the two decimal places only E and F

The Stock A has a beta of 1.49 and an expected return of 13.2 percent. The risk-free asset currently earns 2.86 percent. a. What is the market risk premium? The market risk premium % b. Now you construct the first portfolio in which 74.56% is invested in Stock A and the rest is invested in the risk-free asset. What is the beta of this portfolio? Beta c. What is the expected return on this portfolio? Expected return % d. Now, you want to use the Stock A and the risk free asset to construct the second portfolio that has a beta of 1.13. What are the portfolio weights? Weight of the Stock A % Weight of the risk-free asset % e. For the second portfolio that you just constructed, what is its expected return? Expected return f. If you want to use the Stock A and the risk free asset to construct the third portfolio that has the average systematic risk measured by the market portfolio, what is this thirs portfolio's expected return? Expected return % The Stock A has a beta of 1.49 and an expected return of 13.2 percent. The risk-free asset currently earns 2.86 percent. a. What is the market risk premium? The market risk premium % b. Now you construct the first portfolio in which 74.56% is invested in Stock A and the rest is invested in the risk-free asset. What is the beta of this portfolio? Beta c. What is the expected return on this portfolio? Expected return % d. Now, you want to use the Stock A and the risk free asset to construct the second portfolio that has a beta of 1.13. What are the portfolio weights? Weight of the Stock A % Weight of the risk-free asset % e. For the second portfolio that you just constructed, what is its expected return? Expected return f. If you want to use the Stock A and the risk free asset to construct the third portfolio that has the average systematic risk measured by the market portfolio, what is this thirs portfolio's expected return? Expected return %

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