Reference no: EM132460705
The beta of four stockslong dash-?P, ?Q, R, and S -are 0.44?, 0.91,1.05?, and 1.46 ?, respectively and the beta of portfolio 1 is 0.97
Point 1: 0.97?, the beta of portfolio 2 is 0.85
Point 2: 0.85?, and the beta of portfolio 3 is 1.08
Point 3: 1.08. What are the expected returns of each of the four individual assets and the three portfolios if the current SML is plotted with an intercept of 3.5
Point 4: 3.5?% ?(risk-free rate) and a market premium of 10.0
Point 5: 10.0?% ?(slope of the? line)?
Question 1: What is the expected return of stock? P?
Question 2: What is the expected return of stock? Q?
Question 3: What is the expected return of stock? R?
Question 4: What is the expected return of stock? S?
Question 5: What is the expected return of PORTFOLIO 2?
Question 6: What is the expected return of PORTFOLIO 3?