A stock has a beta of 125 and an expected return of 14


A stock has a beta of 1.25 and an expected return of 14 percent. A risk-free asset currently earns 2.1 percent.

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

b. If a portfolio of the two assets has a bet of .93, what are the portfolio weights?

c. If a portfolio of the two assets has an expected return of 9 percent, what is its beta?

d. If a portfolio of the two assets has a beta of 2.50, what are the portfolio weights? How do you interpret the weights for the two assets in this case? Explain

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: A stock has a beta of 125 and an expected return of 14
Reference No:- TGS0619603

Expected delivery within 24 Hours