Fin 305 – A Stock Has A Beta Of 1.45 And An Expected Return Of 13 Percent

A stock has a beta of 1. 45 and an expected return of 13 percent. A risk-free asset currently earns 4. 0 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (Round your answer to 2 decimal places. (e. g. , 32. 16)) Expected return % b. If a portfolio of the two assets has a beta of 0. 87, what are the portfolio weights? (Round your answer to 4 decimal places. (e. g. , 32. 1616)) Weight of stock Risk-free weight c. If a portfolio of the two assets has an expected return of 9 percent, what is its beta? (Do not round intermediate calculations and round your answer to 3 decimal places. (e. g. , 32. 161)) Beta d. If a portfolio of the two assets has a beta of 2. 90, what are the portfolio weights? (Negative amount should be indicated by a minus sign. ) Weight of stock Risk-free weight

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