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Please help! Suppose SNAP stock has a beta of 1.59, whereas Walmart stock has a beta of 0.95. If the risk-free interest rate is 3.8%
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Suppose SNAP stock has a beta of 1.59, whereas Walmart stock has a beta of 0.95. If the risk-free interest rate is 3.8% and the expected return of the market portfolio is 11.1%, according to the CAPM, a. What is the expected return of SNAP stock? b. What is the expected return of Walmart stock? c. What is the beta of a portfolio valued at $1 million that consists of $550,000 in 65% SNAP stock and $450,000 invested in 35% Walmart stock? d. What is the expected return of a portfolio that consists of 65% SNAP stock and 35% Walmart stock? (There are two ways to solve this.) a. What is the expected return of SNAP stock? SNAP's expected return is %. (Round to one decimal place.) b. What is the expected return of Walmart stock? Walmart's expected return is %. (Round to one decimal place.) c. What is the beta of a portfolio that consists of 65% SNAP stock and 35% Walmart stock? The portfolio beta is (Round to two decimal places.) d. What is the expected return of a portfolio that consists of 65% SNAP stock and 35% Walmart stock? (There are two ways to solve this.) The expected return of the portfolio is % (Round to one decimal place.)Step by Step Solution
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