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problem: A stock has a beta of 0.8 & an expected return of 13%. A risk-free asset currently earns 4%.

[A] find out 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 0.6, find out the portfolio weights?

[C] If a portfolio of the two assets has an expected return of 11%, determine its beta?

[D] If a portfolio of the two assets has a beta of 1.60, determine the portfolio weights? How do you interpret the weights for the two assets in this case? describe your reasoning.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M920792

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