Asset W has an expected return of 13.55 percent and a beta of 1.36. If the risk-

Question

Asset W has an expected return of 13.55 percent and a beta of 1.36. If the risk-free rate is 4.61 percent, complete the following table for portfolios of Asset W and a risk-free asset. (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Enter your portfolio expected return answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter your portfolio beta answers rounded to 3 decimal places, e.g., 32.161.) Percentage of Portfolio Portfolio Portfolio in Asset W Expected Return Beta 0 % % 25 % 50 % 75 % 100 % 125 % 150 %

Explanation / Answer

beta required rate of return 0% 0.000 4.61% 25% 0.340 6.85% 50% 0.680 9.08% 75% 1.020 11.32% 100% 1.360 13.55% 125% 1.700 15.79% 150% 2.040 18.02%

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