At what risk-free rate would these two stocks be correctly


A. You own a $20,000 portfolio that is invested in a risk-free security and Stock A. The beta of Stock A is 1.60 and the portfolio beta is 1.00. What is the amount of the investment in Stock A?

B. Stock A has a beta of 2.0 and an expected return of 13.0 percent. Stock B has a beta of 1.12 and an expected return of 13.70 percent. At what risk-free rate would these two stocks be correctly priced?

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Financial Management: At what risk-free rate would these two stocks be correctly
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