Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need part c and d A stock has a beta of 1.19 and an expected return of 12.4 percent. A risk-free asset currently earns 2.7

need part c and d
image text in transcribed
A stock has a beta of 1.19 and an expected return of 12.4 percent. A risk-free asset currently earns 2.7 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If a portfolio of the two assets has a beta of .92, what are the portfolio weights? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) c. If a portfolio of the two assets has an expected return of 10 percent, what is its beta? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) d. If a portfolio of the two assets has a beta of 2.38, what are the portfolio weights? (Do not round intermediate calculations. A negative answer should be indicated by minus sign.) 7.55% 0.7731 0.2269 a. Expected return b. Weight of stock b. Weight of risk-free c. Portfolio beta d. Weight of stock d. Weight of risk-free

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

Debt Resisters Operations Manual

Authors: Strike Debt Strike Debt

1st Edition

1604866799, 978-1604866797

More Books

Students also viewed these Finance questions

Question

Is SHRD compatible with individual career aspirations

Answered: 1 week ago