Suppose Intel stock has a beta of

0.88,

whereas Boeing stock has a beta of

1.23.

If the risk-free interest rate is

5.9%

and the expected return of the market portfolio is

12.7%,

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

70%

Intel stock and

30%

Boeing stock?

d. What is the expected return of a portfolio that consists of

70%

Intel stock and

30%

Boeing stock? (There are two ways to solve this.)