A stock has a beta of 165 and an expected return of 11, Ask an Expert

Finance

A stock has a beta of 1.65 and an expected return of 11 percent. A risk-free asset currently earns 2.6 percent.

a. 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 (e.g., 32.16).)

Expected return %

b. If a portfolio of the two assets has a beta of .99, what are the portfolio weights? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

Weight of stock

Risk-free weight

c. If a portfolio of the two assets has an expected return of 10 percent, what is its beta? (Do not round intermediate calculations and round your answer to 3 decimal places (e.g., 32.161).)

Beta

d. If a portfolio of the two assets has a beta of 3.3, what are the portfolio weights? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.)

Weight of stock

Risk-free weight

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92406661

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