You own a portfolio equally invested in a risk-free asset


You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.9 and the total portfolio is equally as risky as the market. What is the beta of the second stock?

A stock has an expected return of 11 percent, the risk-free rate is 5.2 percent, and the market risk premium is 5 percent. What is the stock's beta?

 

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Finance Basics: You own a portfolio equally invested in a risk-free asset
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