Find the expected return for a stock with beta of 0.73 and a portfolio with beta of 0.96. Over the past year, the average return on the S&P 500 was 10.22% and the YTM on a Treasury bill with one month left to maturity is currently 3.76%. Which investment has a higher expected return (report the higher expected return in your answer)

For your consideration:

Could you tell which investment had the higher expected return before doing any calculations?

What type of risk does the stock investment have that the portfolio dose not? Did you account for this risk in the expected return computation? Why/why not?

Answer Format: INCLUDE ONLY NUMBERS AND DECIMALS IN YOUR ANSWER. Do not include "$" "," or any other formatting. Carry interim computations to at least 4 decimals.

Enter numerical answers as a positive or negative percentage rounded to 2 decimal places. For example 0.123456 should be enter as: 12.35 (##.##)