A stock has a beta of 1.80 and an expected return of 13 percent. A risk-free asset currently earns 3.2 percent.
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 percent rounded to 2 decimal places, e.g., 32.16.)
Expected return %
c. If a portfolio of the two assets has an expected return of 9 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 3 decimal places, e.g., 32.161.)
Beta
d. If a portfolio of the two assets has a beta of 3.60, what are the portfolio weights? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers as a whole number.)
Weight of stock Risk-free weight
A stock has a beta of 1.80 and an expected return of 13 percent. A risk-free asset currently earns 3.2 percent.
| 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 percent rounded to 2 decimal places, e.g., 32.16.) |
| Expected return | %
|
Related questions
stock has a beta of 1.70 and an expected return of 12 percent. A risk-free asset currently earns 2.8 percent.
| 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 percent rounded to 2 decimal places, e.g., 32.16.) |
| Expected return | % |
| b. | If a portfolio of the two assets has a beta of 1.02, what are the portfolio weights? (Do not round intermediate calculations. Round your answers to 4 decimal places, e.g., 32.1616.) |
| Weight of stock | |
| Risk-free weight |
| c. | If a portfolio of the two assets has an expected return of 10 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 3 decimal places, e.g., 32.161.) |
| Beta |
| d. | If a portfolio of the two assets has a beta of 3.40, what are the portfolio weights? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers as a whole number.) |
| Weight of stock | |
| Risk-free weight |
Hints
References
A stock has a beta of 1.7 and an expected return of 12 percent. A risk-free asset currently earns 2.8 percent.
| 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 percent rounded to 2 decimal places (e.g., 32.16).) |
| Expected return _________________ | % ? |
| b. | If a portfolio of the two assets has a beta of 1.02, what are the portfolio weights? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
| Weight of stock__________? | |
| Risk-free weight__________? |
| c. | If a portfolio of the two assets has an expected return of 10 percent, what is its beta? (Do not round intermediate calculations and round your answer to 3 decimal places (e.g., 32.161).) |
| Beta_________? |
| d. | If a portfolio of the two assets has a beta of 3.4, what are the portfolio weights? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.) |
| Weight of stock_______? | |
| Risk-free weight_______? |
| 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).) |
