What is the beata of the given portfolio

Reference no: EM131972028

Question: The expected return of the S&P500, which you can assume is the tangency portfolio, is 16% and has a standard deviation of 25% per year. The expected return of Microsoft is unknown, but it has a standard deviation of 20% per year and a covariance with the S&P 500 of 0.10. If the risk-free rate is 6% per year,

a. Compute Microsoft's beta

b. What is Microsoft's expected return given the beta computed in part a?

c. If Intel has half the expected return of Microsoft, then what is Intel's beta?

d. What is the beata of the following portfolio? .25 in Microsoft, .10 in Intel, .75 in the S&P 500, .20 in GM (Where Beta of GM is .80), .10 in the risk free asset

e. What is the expected return of the portfolio in part d?

Reference no: EM131972028

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