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Suppose Intel stock has a beta of 0 . 7 7 , whereas Boeing stock has a beta of 1 . 2 1 . If
Suppose Intel stock has a beta of whereas Boeing stock has a beta of If the riskfree interest rate is
and the expected return of the market portfolio is according to the CAPM,
a What is the expected return of Intel stock?
b What is the expected return of Boeing stock?
c What is the beta of a portfolio that consists of Intel stock and Boeing stock?
d What is the expected return of a portfolio that consists of Intel stock and Boeing stock? There are two
ways to solve this.
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