A stock has a beta of 1.35 and an expected return of 14 percent. A risk-free ass

ID: 2696518 • Letter: A

Question

A stock has a beta of 1.35 and an expected return of 14 percent. A risk-free asset currently earns 3.5 percent.

The expected return on a portfolio that is equally invested in the two assets is_______ percent.

If a portfolio of the two assets has a beta of 0.7, the weight of the stock is ____percent and the weight of the risk-free is _______percent.

If a portfolio of the two assets has an expected return of 12 percent, its beta ________.

If a portfolio of the two assets has a beta of 2.05, the weight of the stock is_______ percent and the weight of the risk-free is_________ percent

A stock has a beta of 1.35 and an expected return of 14 percent. A risk-free asset currently earns 3.5 percent.

The expected return on a portfolio that is equally invested in the two assets is8.75 percent.

If a portfolio of the two assets has a beta of 0.7, the weight of the stock is 51.85percent and the weight of the risk-free is48.15 percent.

If a portfolio of the two assets has an expected return of 12 percent, its beta 1.09

If a portfolio of the two assets has a beta of 2.05, the weight of the stock is151.85 percent and the weight of the risk-free is -51.85percent

(a)

The expected return on a portfolio that is equally invested in the two assets is8.75 percent.

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