I. Asset W has an expected return of 10.6 percent and a beta of 1.40. If the risk-free rate is 3.6 percent, complete the following table for portfolios of Asset W and a risk-free asset. (Leave no cells blank - be certain to enter "0" wherever required.Enter your expected returns as a percent rounded to 2 decimal places, e.g., 32.16, and your beta answers to 3 decimal places, e.g., 32.161.)

Percentage of Portfolio in Asset W		Portfolio Expected Return		Portfolio Beta
0	%	___%			____
25		___%			____
50		___%			____
75		___%			____
100		___%			____
125		___%			____
150		___%			____

If you plot the relationship between portfolio expected return and portfolio beta, what is the slope of the line that results? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Slope of the line

%

II. Consider the following information:

State of Economy	Probability of State of Economy			Portfolio Return If State Occurs
Recession		.31			.16
Boom		.69			.22

Calculate the expected return. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return

%