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Please include formulas and calculations. Thanks A stock has a beta of 1.45 and an expected return of 13 percent. A risk-free asset currently earns
Please include formulas and calculations. Thanks
A stock has a beta of 1.45 and an expected return of 13 percent. A risk-free asset currently earns 4.0 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Expected return % b. If a portfolio of the two assets has a beta of 0.87, what are the portfolio weights? (Do not round intermediate calculations. Round the final answers to 4 decimal places.) Weight of stock Risk-free weight c. If a portfolio of the two assets has an expected return of 9 percent, what is its beta? (Do not round intermediate calculations. Round the final answer to 3 decimal places.) Beta d. If a portfolio of the two assets has a beta of 2.9, what are the portfolio weights? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) Weight of stock Risk-free weightStep by Step Solution
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