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Suppose Intel stock has a beta of 0.85, whereas Boeing stock has a beta of 1.22. If the risk-free interest rate is 3.5% and the
Suppose Intel stock has a beta of 0.85, whereas Boeing stock has a beta of 1.22. If the risk-free interest rate is 3.5% and the expected return of the market portfolio is 12.2%, 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 60% Intel stock and 40% Boeing stock? d. What is the expected return of a portfolio that consists of 60% Intel stock and 40% Boeing stock? (There are two ways to solve this.) a. What is the expected return of Intel stock? Intel's expected return is %. (Round to one decimal place.) b. What is the expected return of Boeing stock? Boeing's expected return is %. (Round to one decimal place.) c. What is the beta of a portfolio that consists of 60% Intel stock and 40% Boeing stock? The portfolio beta is (Round to two decimal places.) d. What is the expected return of a portfolio that consists of 60% Intel stock and 40% Boeing stock? (There are two ways to solve this.) The expected return of the portfolio is %. (Round to one decimal place.)
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