Question: Asset W has an expected return of 12.9% and a beta of 1.30. If the risk free rate is 4.1%, complete the following table for portfolios of Asset W and a risk free asset. Illustrate the relationship between the portfolio expected return and portfolio beta by plotting the expected returns against the betas. What is the slope of the line that results?
Percentage of Portfolio Assets in W =
0%
25%
50%
75%
100%
125%