Suppose Intel stock has a beta of 1.52?, whereas Boeing stock has a beta of 0.88....

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Suppose Intel stock has a beta of 1.52?, whereas Boeing stockhas a beta of 0.88. If the? risk-free interest rate is 4.1% and theexpected return of the market portfolio is 12.2%?, according tothe? CAPM,

a. What is the expected return of Intel? stock?

b. What is the expected return of Boeing? stock?

c.What is the beta of a portfolio that consists of 70 % Intelstock and 30% Boeing? stock?

d. What is the expected return of a portfolio that consists of70% Intel stock and 30% Boeing? stock? (There are two ways tosolve? this.)

Answer & Explanation Solved by verified expert
3.5 Ratings (587 Votes)
According to CAPM model expected returnRisk free rateBetaMarket returnRisk free rate Part a For Intel stock Risk free rate41 Market return122 Beta152 Expected return4115212241 411520081 41012312    See Answer
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Suppose Intel stock has a beta of 1.52?, whereas Boeing stockhas a beta of 0.88. If the? risk-free interest rate is 4.1% and theexpected return of the market portfolio is 12.2%?, according tothe? CAPM,a. What is the expected return of Intel? stock?b. What is the expected return of Boeing? stock?c.What is the beta of a portfolio that consists of 70 % Intelstock and 30% Boeing? stock?d. What is the expected return of a portfolio that consists of70% Intel stock and 30% Boeing? stock? (There are two ways tosolve? this.)

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