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The stock A has a beta of 1.36 and an expected return of 13.8 percent. A risk-free asset currently earns 2.9 percent. If you want
The stock A has a beta of 1.36 and an expected return of 13.8 percent. A risk-free asset currently earns 2.9 percent.
If you want to use the stock A and the risk free asset to construct a portfolio that has a beta of 0.82, what are the portfolio weights?
Weight of the stock | % |
Weight of the risk-free asset % |
. For this portfolio that you just constructed, what is its expected return?
. If you want to use the stock A and the risk free asset to construct a portfolio that has the average systematic risk, what is this portfolio's expected return?
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