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Suppose Autodesk stock has a beta of 2.40, whereas Costco stock has a beta of 0.74. If the risk-free interest rate is 4.5% and the
Suppose Autodesk stock has a beta of 2.40, whereas Costco stock has a beta of 0.74. If the risk-free interest rate is 4.5% and the expected return of the market portfolio is 11.5%, what is the expected return of a portfolio that consists of 60% Autodesk stock and 40% Costco stock, according to the CAPM? The expected return is %. (Round to two decimal places.) You are thinking of buying a stock priced at $99 per share. Assume that the risk-free rate is about 4.5% and the market risk premium is 6.7%. If you think the stock will rise to $117 per share by the end of the year, at which time it will pay a $2.03 dividend, what beta would it need to have for this expectation to be consistent with the CAPM? The beta is (Round to two decimal places.)
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