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Suppose Intel stock has a beta of 0.75, whereas Boeing stock has a beta of 1.27. If the risk-free interest rate is 5.5% and the

Suppose Intel stock has a beta of 0.75, whereas Boeing stock has a beta of 1.27. If the risk-free interest rate is 5.5% and the expected return of the market portfolio is 12.6%, 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 55% Intel stock and 45% Boeing stock?

d. What is the expected return of a portfolio that consists of 55% Intel stock and 45% Boeing stock? (There are two ways to solve this.)

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