An individual plans to invest in stock a andor stock b what


An individual plans to invest in Stock A and/or Stock B. The expected returns are 9% and 10% for A and B, respectively. The betas are 0.95 and 1.25 for stocks A and B respectively.

1. Find the expected return for the portfolio if she invests 75% of her funds in Stock A.

2. Find the beta for portfolio if she invest 75% of her funds in Stock A

3. Suppose the investor want sto construct a portfoilio with expected return equal to 9.5%

3A. What are the portfolio weights for this portfolio?

3B. What is the beta for the portfolio?

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Financial Management: An individual plans to invest in stock a andor stock b what
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