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Suppose Bank of America Stock has a beta of 1.32, whereas Boeing Stock has a beta of 1.23. If the risk-free interest rate is 1.78% and the expected return of the market portfolio is 10%, according to the CAPM?

A. What is the expected return of Bank of America Stock? (Please Show Calculations - No excel please)

B. What is the expected return of Boeing Stock? (Please Show Calculations - No excel please)

C. What is the beta of a portfolio that consists of 45% Bank of America stock and 55% Boeing stock? (Please Show Calculations - No excel please)

D. What is the expected return of a portfolio that consists of 45% Bank of America stock and 55% Boeing stock? (Please solve it using two ways) - (Please Show Calculations)

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92791566

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