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Suppose Intel stock has a beta of , whereas Boeing stock has a beta of . If the risk-free interest rate is and the expected

Suppose Intel stock has a beta of , whereas Boeing stock has a beta of . If the risk-free interest rate is and the expected return of the market portfolio is , 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 Intel stock and Boeing stock?

d. What is the expected return of a portfolio that consists of Intel stock and Boeing stock? (There are two ways to solve this.)

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