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Expected return on a portfolio in two assets

Problem: A stock has a beta of 1.30 and an expected return of 10 percent. A risk-free asset currently earns 3.4 percent.

a. What is the expected return on a portfolio that is equally invested in the two assets? Expected return %

b. If a portfolio of the two assets has a beta of 1.04, what are the portfolio weights?

- Weight of stock
- Risk-free weight

c. If a portfolio of the two assets has an expected return of 8 percent, what is its beta?

-Beta

d. If a portfolio of the two assets has a beta of 2.60, what are the portfolio weights?

- Weight of stock
- Risk-free weight

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Expected return on a portfolio in two assets

Reference No:- TGS01449687

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Expected return on a portfolio in two assets

Reference No:- TGS01449687

Recent Questions Asked Finance Basics

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