the following table for portfolios of Asset W and a risk-free asset. (Leave no c

Question

the following table for portfolios of Asset W and a risk-free asset. (Leave no cells blan to enter wherever required. Do not round intermediate calculations. Enteryour Asset W has an expected return of 11.4 percent and a beta of 1.40 If the risk-free rate is 3.7 p expected returns as a percent rounded to 2 decimal places, e.g., 32.16, and your beta a 3 decimal places, e.g.. 32.161.) n Asset W Expected Return Beta 0% 25 50 75 100 125 150 between portfolio expected return and porfolio beta, what is the slope of the line that results? (Do not round intermediate calculations. Enter your answer as a percent decimal places, e.g., 32.16.) Slope of the line

Explanation / Answer

Part - A

Slope of the line

=Risk Free Rate + Beta(Rm-Rf)

=3.70+1.40(11.40-10.78)

=14.48%

Percentage of Portfolio Asset (Weight) (A) Portfolio Expected Return(B=11.40*A) Portfoli o Beta (C=A*1.40) 0 0 0 0.25 2.81% 0.35 0.50 5.62% 0.70 0.75 8.43% 1.05 1.00 11.24% 1.40 1.25 14.05% 1.75 1.50 16.86% 2.10

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