What is the expected return on a portfolio

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Question - 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 0.93, what are the portfolio weights?

c) If a portfolio of the two assets has an expected return of 9 percent, what is its beta?

d) If a portfolio of the two assets has a beta of 2.50, what are the portfolio weights?

e) In order to achieve a firm's primary goal of maximizing stockholder wealth, the financial manager performs a number of important functions. What are the three major functions of financial management?

Reference no: EM132605102

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