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Please answer the question and show work. A stock has a beta of 1.35 and an expected return of 13.3 percent. A risk-free asset currently
Please answer the question and show work.
A stock has a beta of 1.35 and an expected return of 13.3 percent. A risk-free asset currently earns 4.55 percent Required (a) What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Expected return 8.925 % (b) If a portfolio of the two assets has a beta of 0.95, what are the portfolio weights? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) Weight of the stock Weight of the risk-free asset (c) If a portfolio of the two assets has an expected return of 12.5 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Beta (d) If a portfolio of the two assets has a beta of 2.55, what are the portfolio weights? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) Weight of the stock Weight of the risk-free assetStep by Step Solution
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