Suppose Intel stock has a beta of 1.6

1.6, whereas Boeing stock has a beta of 1

1. If therisk-free interest rate is 4.0 %

4.0% and the expected return of the market portfolio is 10.0 %

10.0%, according to theCAPM,

a. What is the expected return of Intelstock?

b. What is the expected return of Boeingstock?

c. What is the beta of a portfolio that consists of 60 %

60% Intel stock and 40 %

40% Boeingstock?

d. What is the expected return of a portfolio that consists of 60 %

60% Intel stock and 40 %

40% Boeingstock? (There are two ways to solvethis.)