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Suppose Intel stock has a beta of 1.42, whereas Boeing stock has a beta of 0.94. If the risk-free interest rate is 3.8% and the expected return of the market portfolio is 11.3%, according to the CAPM,

a. What is the expected return of Intel stock?

b. What is the expected return of Boeing stock?

c. What is the beta of a portfolio that consists of 65% Intel stock and 35% Boeing stock?

d. What is the expected return of a portfolio that consists of 65% Intel stock and 35% Boeing stock? (There are two ways to solve this.)

Financial Management, Finance

  • Category:- Financial Management
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