- +44 141 628 6080
- info@tutorsglobe.com

Estimate expected return on a portfolio

A stock has a beta of 1.20 and an expected return of 14 percent. A risk-free asset currently earns 3.0 percent.

a. What is the expected return on a portfolio that is equally invested in the two assets? (Round your answer to 2 decimal places. (e.g., 32.16))

Expected return %

b. If a portfolio of the two assets has a beta of 0.72, what are the portfolio weights? (Round your answer 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 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 2.40, what are the portfolio weights? (Negative amount should be indicated by a minus sign.)

Weight of stock

Risk-free weight

Expected delivery within 24 Hours

1941645

Questions

Asked

3,689

Active Tutors

1420959

Questions

Answered

**
Start Excelling in your courses, Ask a tutor for help and get answers for your problems !! **

©TutorsGlobe All rights reserved 2022-2023.

## Q : Determining dollar growth in assets

Middleton Clinic had total assets of $500,000 and an equity balance of $350,000 at the end of 2006. One year later, at the end of 2007, the clinic had $575,000 in assets and $380,000 in equity.