What is the expected return on a portfolio

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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 bet 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?

d. If a portfolio of the two assets has a beta of 2.50, what are the portfolio weights? How do you interpret the weights for the two assets in this case? Explain

Reference no: EM13280894

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