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A stock has a beta of 1.25 and an expected return of 14 percent. A risk-free asset currently earns 2.1 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 .93, what are the portfolio weights?
c. If a portfolio of the two assets has an expected return of 9 percent, what is its beta? (Do not round intermediate calculations and round your answer to 3 decimal places. (e.g., 32.161))
d. If a portfolio of the two assets has a beta of 2.50, what are the portfolio weights? (Negative amount should be indicated by a minus sign.)
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