Asset W has an expected return of 13.0 percent and a beta of 1.25. If the risk-f

Question

Asset W has an expected return of 13.0 percent and a beta of 1.25. If the risk-free rate is 4.8 percent, complete the following table for portfolios of Asset W and a risk-free asset. (Round your expected return answers to 2 decimal places. (e.g., 32.16) and beta answers to 3 decimal places. (e.g., 32.161))

If you plot the relationship between portfolio expected return and portfolio beta, what is the slope of the line that results? (Round your answer to 2 decimal places. (e.g., 32.1616))

Percentage of Portfolio
in Asset W Portfolio
Expected Return Portfolio
Beta 0% 25 50 75 100 125 150

Explanation / Answer

Percentage of Portfolio

The slope of the line will be 6.56%

Percentage of Portfolio

Portfolio Portfolio in Asset W Expected Return Beta 0% 4.80% 0% 25% 6.85%       0.31 50% 8.90%       0.63 75% 10.95%       0.94 100% 13.00%       1.25 125% 15.05%       1.56 150% 17.10%       1.88

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