What is the expected return on portfolio

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A stock has a beta of 1.70 and an expected return of 12 percent. A risk-free asset currently earns 2.8 percent.

a. What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return %

b. If a portfolio of the two assets has a beta of 1.02, what are the portfolio weights? (Do not round intermediate calculations. Round your answers to 4 decimal places, e.g., 32.1616.)

Weight of stock

Risk-free weight

c. If a portfolio of the two assets has an expected return of 10 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 3 decimal places, e.g., 32.161.)

Beta

d. If a portfolio of the two assets has a beta of 3.40, what are the portfolio weights? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers as a whole number.)

Weight of stock

Risk-free weight

Reference no: EM131607798

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