Could you please help me with the Risk-Free Weight for question d. I caluculated

Question

Could you please help me with the Risk-Free Weight for question d. I caluculated -11, but connect says it is inncorect. Thank you!!!

17.00 points ent. A risk-free asset currently earns 2.4 A stock has a beta of 1.60 and an expected return of 10 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (Round your answer to 2 decimal places. (e.g., 3 2.16)) Expected return 6.2 % b. If a portfolio of the two assets has a beta of 0.88, what are the portfolio weights? (Round your answer to 4 decimal places. (e.g., 32.1616)) Weight of stock Risk-free weight 45 c. If a portfolio of the two assets has an expected return of 9 percent, what is its beta? (Do not round intermediate calculations and round your answer to 3 decimal places. (e.g., 32.161)) Beta 1.38 d. If a portfolio of the two assets has a beta of 3.20, what are the portfolio weights? (Negative amount should be indicated by a minus sign.) Weight of stock Risk-free weight 2

Explanation / Answer

c)let the portfolio weights be 'w' of the stock and 1-w of the risk free asset.

expected return=10*w+2.4*(1-w)=9

=>7.6w=9-2.4=6.6

=>w=6.6/7.6

Therefore portfolio beta=(6.6/7.6)*1.6=1.389

Beta=1.389(round answer to 3 decimal places)

d)let the portfolio weights be 'w' of the stock and 1-w of the risk free asset.

Thus the beta of the portfolio=w*1.6+(1-w)*0=1.6*w=3.2

=>w=3.2/1.6=2

therefore the weight of stock=2

the weight of the risk free asset=1-2=-1

Wight of stock=2

Risk free weight= -1

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