Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. 3 a stock has a beta of 1.31 and an expected retur

3 A stock has a beta of 1.31 and an expected return of 12.9 percent....

80.2K

Verified Solution

Question

Finance

3 A stock has a beta of 1.31 and an expected return of 12.9 percent. A risk-free asset currently earns 4.35 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 .91, 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 12.1 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 2.51, 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.) Expected return b. Weight of stock a. Weight of risk-free asset C. Beta d. Weight of stock Weight of risk-free %
image
A stock has a beta of 1.31 and an expected return of 12.9 percent. A risk-free asset currently earns 4.35 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 .91, 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 12.1 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 2.51 , 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.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students