A stock has a beta of 1.0 and an expected return of 20 percent. A risk-free asse
ID: 2634690 • Letter: A
Question
A stock has a beta of 1.0 and an expected return of 20 percent. A risk-free asset currently earns 5.1 percent.
What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
If a portfolio of the two assets has a beta of .41, what are the portfolio weights? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
If a portfolio of the two assets has an expected return of 10.75 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 4 decimal places.)
If a portfolio of the two assets has a beta of 1.18, what are the portfolio weights? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
A stock has a beta of 1.0 and an expected return of 20 percent. A risk-free asset currently earns 5.1 percent.
Explanation / Answer
a)
Return from the Stock be X= 20%
Risk free asset
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