Question
Suppose Intel stock has a beta of 1.49, whereas Boeing stock has a beta of 0.8. If the risk-free interest rate is 3.6% and the
Suppose Intel stock has a beta of 1.49, whereas Boeing stock has a beta of 0.8. If the risk-free interest rate is 3.6% and the expected return of the market portfolio is 12.9%, 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.)
a. What is the expected return of Intel stock? Intel's expected return is enter your response here%. (Round to one decimal place.)
b. What is the expected return of Boeing stock? Boeing's expected return is enter your response here%. (Round to one decimal place.)
c. What is the beta of a portfolio that consists of 70% Intel stock and 30% Boeing stock?The portfolio beta is enter your response here. (Round to two decimal places.)
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.)The expected return of the portfolio is enter your response here%. (Round to one decimal place.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started