Question

A stock has a beta of 1.20 and an expected return of 14 percent. a risk-free...

A stock has a beta of 1.20 and an expected return of 14 percent. a risk-free asset currently earns 3 percent.

What is the expected return on a portfolio that is equally invested in the two assets? ( do not round intermediate calculations and round your answer to 2 decimal places)

If a portfolio of the two assets has a beta of .72 ,what are the portfolio weights?( do not round intermediate calculations and round your answer to 4 decimal places)

If the portfolio of the two assets has an expected return of 10 percent, what is its beta?( do not round intermediate calculations and round your answer to 3 decimal places)

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Stock A has a beta of 1.2 and an expected return of 10%. The risk-free asset...
Stock A has a beta of 1.2 and an expected return of 10%. The risk-free asset currently earns 4%. If a portfolio of the two assets has an expected return of 6%, what is the beta of the portfolio? A) 0.3 B) 0.4 C) 0.5 D) 0.6 E) 0.7
Suppose the risk-free rate is 4.8 percent and the market portfolio has an expected return of...
Suppose the risk-free rate is 4.8 percent and the market portfolio has an expected return of 11.5 percent. The market portfolio has a variance of .0442. Portfolio Z has a correlation coefficient with the market of .34 and a variance of .3345    According to the capital asset pricing model, what is the expected return on Portfolio Z? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
A stock has an expected return of 10.2 percent, the risk-free rate is 5 percent, and...
A stock has an expected return of 10.2 percent, the risk-free rate is 5 percent, and the market risk premium is 9 percent. What must the beta of this stock be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Multiple Choice .5778 .7562 .5168 .4333 .6008
A stock has a beta of 0.7 and an expected return of 11.1 percent. If the...
A stock has a beta of 0.7 and an expected return of 11.1 percent. If the risk-free rate is 4.7 percent, what is the market risk premium? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
ou are constructing a portfolio of two assets. Asset A has an expected return of 12...
ou are constructing a portfolio of two assets. Asset A has an expected return of 12 percent and a standard deviation of 24 percent. Asset B has an expected return of 18 percent and a standard deviation of 54 percent. The correlation between the two assets is 0.20 and the risk-free rate is 4 percent. What is the weight of each asset in the portfolio of the two assets that has the largest possible Sharpe ratio? (Do not round intermediate...
A stock has a beta of 1.3 and an expected return of 14%. The risk free...
A stock has a beta of 1.3 and an expected return of 14%. The risk free rate is 2% and the expected return on the market portfolio is 9%. How much better (or worse) is the expected return on the stock compared to what it should be according to the CAPM? Enter answer in percents, accurate to two decimal places.
You own a portfolio equally invested in a risk-free asset and two stocks. One of the...
You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.2 and the total portfolio is equally as risky as the market. What must the beta be for the other stock in your portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Beta   
You own a portfolio equally invested in a risk-free asset and two stocks. One of the...
You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.15 and the total portfolio is equally as risky as the market. What must the beta be for the other stock in your portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Beta            
Suppose that the S&P 500, with a beta of 1.0, has an expected return of 14%...
Suppose that the S&P 500, with a beta of 1.0, has an expected return of 14% and T-bills provide a risk-free return of 5%. a. What would be the expected return and beta of portfolios constructed from these two assets with weights in the S&P 500 of (i) 0; (ii) 0.25; (iii) 0.50; (iv) 0.75; (v) 1.0? (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Enter the value of Expected return...
Q1/A stock has an expected return of 11.7 percent and a beta of 1.54, and the...
Q1/A stock has an expected return of 11.7 percent and a beta of 1.54, and the expected return on the market is 8.4 percent. What must the risk-free rate be? (Enter answer in percents, not in decimals.) Q2/You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below: Asset Investment Beta Stock A $149,241 0.82 Stock B $134,515 1.36 Stock C -- 1.44 Risk-free asset...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT