John invested the following amounts in three stocks:
Security Investment Beta Stock A $880,496 1.21 Stock B $113,484 1.21 Stock C $883,199 2.06
Calculate the beta portfolio.
Round the answers to two decimal places.
John invested the following amounts in three stocks:
Security | Investment | Beta |
---|---|---|
Stock A | $880,496 | 1.21 |
Stock B | $113,484 | 1.21 |
Stock C | $883,199 | 2.06 |
Calculate the beta portfolio.
Round the answers to two decimal places.
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Related questions
A stock has a beta of 1.21 and an expected return of 11.9 percent. A risk-free asset currently earns 3.85 percent. What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) If a portfolio of the two assets has a beta of 0.81, what are the portfolio weights (Weight of the stock and Weight of the risk-free asset)? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) If a portfolio of the two assets has an expected return of 11.1 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) If a portfolio of the two assets has a beta of 2.41, what are the portfolio weights (Weight of the stock and Weight of the risk-free asset)? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) |
Problem 11-17 Using CAPM [LO 4]
A stock has a beta of 1.21 and an expected return of 11.9 percent. A risk-free asset currently earns 3.85 percent. |
Required: | |
(a) | What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) |
Expected return | % |
(b) | If a portfolio of the two assets has a beta of 0.81, what are the portfolio weights? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) |
Weight of the stock | |
Weight of the risk-free asset |
(c) | If a portfolio of the two assets has an expected return of 11.1 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
Beta |
(d) | If a portfolio of the two assets has a beta of 2.41, what are the portfolio weights? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) |
Weight of the stock | |
Weight of the risk-free asset | |