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problem: A stock has beta of 1.5 & an expected return of 11 percent. A risk free asset earns 2%.

[A] If a portfolio of the two assets has an expected return of 9 percent, determine the beta?

[B] find out the expected return on a portfolio that is equally invested in the two assets?

[C] If a portfolio of the two assets has a beta of 0.9 determine the portfolio weights?

[D] If a portfolio of the two assets has a beta of 1.80, determine the portfolio weights? How do you interpret the weights for the two assets in this case? describe your reason.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M919619

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