A stock has a beta of 125 and an expected return of 14, Ask an Expert

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A stock has a beta of 1.25 and an expected return of 14 percent. A risk-free asset currently earns 2.1 percent.

a. What is the expected return on a portfolio that is equally invested in the two assets?

b. If a portfolio of the two assets has a beta of .93, what are the portfolio weights?

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))

d. If a portfolio of the two assets has a beta of 2.50, what are the portfolio weights? (Negative amount should be indicated by a minus sign.)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92843754

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