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You will have a portfolio that is only comprised of two assets. You plan to allocate 48.6% into asset A, which has an expected
You will have a portfolio that is only comprised of two assets. You plan to allocate 48.6% into asset A, which has an expected return of 12.9%. The remainder of your portfolio will be allocated to asset B, which has an expected return of 5.2%. What is your expected return on this two-asset portfolio? State your answer as a percentage with two decimal places and not in decimal form (i.e, 13.21, not 0.1321). The risk-free rate is 1.59%, a stock's adjusted systematic risk exposure is 0.99, and the market risk premium is 5.23%. If the expected return for this stock is 7.31%, then what is the estimated alpha according to the Capital Asset Pricing Model? State your answer as a percentage with two decimal places and not in decimal form (i.e, 13.21, not 0.1321).
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