Portfolio equally invested in risk-free asset and two stocks

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Reference no: EM131921859

1. You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.29 and the total portfolio is equally as risky as the market.

What must the beta be for the other stock in your portfolio?

2. Can you compute the equilibrium call price if you know the price of put, e.g. 50 cents; the strike price of $125 a share optioned; and the risk-free rate of interest is 3%?

Reference no: EM131921859

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