Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

im not sure if my answers for a and b are right. Please help Suppose Intel stock has a beta of 0.89, whereas Boeing stock

im not sure if my answers for a and b are right. Please help
image text in transcribed
Suppose Intel stock has a beta of 0.89, whereas Boeing stock has a beta of 1.28. If the risk-free interest rate is 6.4% and the expected return of the market portfolio is 10.4%, according to the CAPM, a. What is the expected return of Intel stock? b. What is the expected return of Boeing stock? c. What is the beta of a portfolio that consists of 55% Intel stock and 45% Boeing stock? d. What is the expected return of a portfolio that consists of 55% Intel stock and 45% Boeing stock? (There are two ways to solve this.) a. What is the expected return of Intel stock? Intel's expected return is 16.36%. (Round to one decimal place.) b. What is the expected return of Boeing stock? Boeing's expected return is 11.52 %. (Round to one decimal place.) c. What is the beta of a portfolio that consists of 55% Intel stock and 45% Boeing stock? The portfolio beta is (Round to two decimal places.) d. What is the expected return of a portfolio that consists of 55% Intel stock and 45% Boeing stock? (There are two ways to solve this.) The expected return of the portfolio is 1%. (Round to one decimal place.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions