Suppose Bank of America Stock has a beta of 1.32, whereas Boeing Stock has a beta of 1.23. If the risk-free interest rate is 1.78% and the expected return of the market portfolio is 10%, according to the CAPM?
A. What is the expected return of Bank of America Stock? (Please Show Calculations - No excel please)
B. What is the expected return of Boeing Stock? (Please Show Calculations - No excel please)
C. What is the beta of a portfolio that consists of 45% Bank of America stock and 55% Boeing stock? (Please Show Calculations - No excel please)
D. What is the expected return of a portfolio that consists of 45% Bank of America stock and 55% Boeing stock? (Please solve it using two ways) - (Please Show Calculations)