A stock has a beta of 1.25 and an expected return of 12.3 percent. A risk-free asset currently
earns 4.05 percent. a. What is the expected return on a portfolio that is equally invested in the
two assets? Note: Do not round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16 . b. If a portfolio of the two assets has a beta of 85 , what
are the portfolio weights? Note: Do not round intermediate calculations and round your answers
to 4 decimal places, e.g., 1616. c. If a portfolio of the two assets has an expected return of 11.5
percent, what is its beta? Note: Do not round intermediate calculations and round your answer to
2 decimal places, e.g. 32.16. d. If a portfolio of the two assets has a beta of 2.45 , what are the
portfolio weights? Note: A negative answer should be indicated by a minus sign. Do not round
intermediate calculations and round your answers to 4 decimal places, e.g., .1616 ..
A stock has a beta of 1.25 and an expected return of 12.3 percent. A .pdf
1. A stock has a beta of 1.25 and an expected return of 12.3 percent. A risk-free asset currently
earns 4.05 percent. a. What is the expected return on a portfolio that is equally invested in the
two assets? Note: Do not round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16 . b. If a portfolio of the two assets has a beta of 85 , what
are the portfolio weights? Note: Do not round intermediate calculations and round your answers
to 4 decimal places, e.g., 1616. c. If a portfolio of the two assets has an expected return of 11.5
percent, what is its beta? Note: Do not round intermediate calculations and round your answer to
2 decimal places, e.g. 32.16. d. If a portfolio of the two assets has a beta of 2.45 , what are the
portfolio weights? Note: A negative answer should be indicated by a minus sign. Do not round
intermediate calculations and round your answers to 4 decimal places, e.g., .1616 .
