Using capm a stock has a beta of 115 and an expected return


Using CAPM. A stock has a beta of 1.15 and an expected return of 10.4 percent. A risk-free asset currently earns 3.8 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 beta of .7, 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 2.3, what are the portfolio weights? How do you interpret the weights for the two assets in this case? Explain.

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Financial Management: Using capm a stock has a beta of 115 and an expected return
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