Details of this Paper

A stock has a beta of .9 and an expected return of...

Description

Solution


Question

A stock has a beta of .9 and an expected return of 9 percent. A risk-free asset currently earns 4 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 .5, what are the portfolio weights? c. If a portfolio of the two assets has an expected return of 8 percent, what is its beta? d. If a portfolio of the two assets has a beta of 1.80, what are the portfolio weights? How do you interpret the weights for the two assets in this case? Explain.,Thanks for your help

 

Paper#5568 | Written in 18-Jul-2015

Price : $25
SiteLock