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What are the portfolio weights

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Question: Using CAPM. A stock has a beta of 1.23 and an expected return of 11.7 percent. A risk-free asset currently earns 3.5 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 2.46, what are the portfolio weights? How do you interpret the weights for the two assets in this case? Explain.

Reference no: EM131732659

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