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Suppose Intel stock has a beta of 1.7,whereas Boeing stock has a beta of 0.84. If therisk-free interest rate is 4.6%and the expected return of
Suppose Intel stock has a beta of 1.7,whereas Boeing stock has a beta of 0.84. If therisk-free interest rate is 4.6%and the expected return of the market portfolio is 13.5%,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 of60%Intel stock and 40%Boeingstock?
d. What is the expected return of a portfolio that consists of60%Intel stock and 40%Boeingstock? (Show both ways to solvethis.)
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