A stock has a beta of 1.39 and an expected return of 13.7 percent. A risk-free asset currently earns 4.75 percent. a. What is the expected return on a portfolio that is equally invested in the two...


A stock has a beta of 1.39 and an expected return of 13.7 percent. A risk-free asset<br>currently earns 4.75 percent.<br>a. What is the expected return on a portfolio that is equally invested in the two assets?<br>(Do not round intermediate calculations and enter your answer as a percent<br>rounded to 2 decimal places, e.g., 32.16.)<br>b. If a portfolio of the two assets has a beta of .99, what are the portfolio weights? (Do<br>not round intermediate calculations and round your answers to 4 decimal places,<br>e.g., 1616.)<br>c. If a portfolio of the two assets has an expected return of 12.9 percent, what is its beta?<br>(Do not round intermediate calculations and round your answer to 2 decimal<br>places, e.g., 32.16.)<br>d. If a portfolio of the two assets has a beta of 2.59, what are the portfolio weights? (A<br>negative answer should be indicated by a minus sign. Do not round intermediate<br>calculations and round your answers to 4 decimal places, e.g., 1616.)<br>a. Expected return<br>b. Weight of stock<br>Weight of risk-free asset<br>%<br>c. Beta<br>d. Weight of stock<br>Weight of risk-free<br>

Extracted text: A stock has a beta of 1.39 and an expected return of 13.7 percent. A risk-free asset currently earns 4.75 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If a portfolio of the two assets has a beta of .99, what are the portfolio weights? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 1616.) c. If a portfolio of the two assets has an expected return of 12.9 percent, what is its beta? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. If a portfolio of the two assets has a beta of 2.59, what are the portfolio weights? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 1616.) a. Expected return b. Weight of stock Weight of risk-free asset % c. Beta d. Weight of stock Weight of risk-free

Jun 06, 2022
SOLUTION.PDF

Get Answer To This Question

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here