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Suppose Intel stock has a beta of 1.72, whereas Boeing stock has a beta of 0.96. If the risk-free interest rate is 4.4% and the
Suppose Intel stock has a beta of 1.72, whereas Boeing stock has a beta of 0.96. If the risk-free interest rate is 4.4% and the expected return of the market portfolio is 12.3%, 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 65% Intel stock and 35% Boeing stock?
d. What is the expected return of a portfolio that consists of 65% Intel stock and 35% Boeing stock? (Show both ways to solve this.)
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