A stock has a beta of 0.9 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?Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.Answer is complete and correct.Expected return6.50%b. If a portfolio of the two assets has a beta of 0.5, what are the portfolio weights?Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.StockRisk-free assetPortfolio Weight%%

Step 1:(a). The return of a portfolio is the weighted average return of the securities which…

Answered: A stock has a beta of 0.9 and an…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A stock has a beta of 1.26 and an expected return of 12.4 percent. A risk-free asset currently earns 4.1 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (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 .86, what are the portfolio weights? (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 11.6 percent, what is its beta? (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 2.46, what are the portfolio weights? (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.)
kindly be as detailed as possible with the calculations. Preferably in excel.
A stock has a beta of 1.39 and an expected return of 13.7 percent. A risk-free asset currently earns 4.75 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (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 .99, what are the portfolio weights? (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 12.9 percent, what is its beta? (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 2.59, what are the portfolio weights? (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. Expected return b. Weight of stock Weight of risk-free…
A stock has a beta of 1.2 and an expected return of 14 percent. A risk-free asset currently earns 3.8 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.) Expected return % b. If a portfolio of the two assets has a beta of 0.20, what are the portfolio weights? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Stock Risk-free asset Portfolio Weight % % c. If a portfolio of the two assets has an expected return of 12.50 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 4 decimal places.) Beta
Parts A-C have already been answered, looking for answer D.
Start with A-C and I will submit seperately for D! Thank you :)
please help someone!!
A stock has a beta of 1.22 and an expected return of 12 percent. A risk-free asset currently earns 3.9 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 .82, 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 11.2 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 2.42, 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. Expected return b. Weight of stock Weight of…
Already have answers for A-C, just need D. Thank you! :)
If a given stock in the portfolio had established 1.23 beta; the related expected return is at 11.7percent, and 3.5percent is the current earning of a risk-free asset; a. Determine 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 0.7, what are the portfolio weights? c. If a portfolio of the two assets has an expected return of 9%, what is its beta? d. If a portfolio of the two assets has a beta of 2.46, what are the portfolio weights? How do you interpret the weights for the two assets in this case? Discuss.
An Equity has a beta of 0.9 and an expected return of 9%. A risk free asset currently earns 2%. i.) What is the expected return on a portfolio that is equally invested in two assets? ii.) If a portfolio of the two assets has an expected return of 6%, what is its beta? iii.) If a portfolio of the two assets has a beta of 1.5, what is its weight ? Iv.) If a portfolio of the two assets has a beta of 1.5, what are the portfolio weights? How do you interpret the weights for the two assets in this case? Explain.
Suppose Stock A has B = 1 and an expected return of 11%. Stock B has a B = 1.5. The risk- free rate is 5%. Also consider that the covariance between B and the market is 0.135. Assume the CAPM is true. Answer the following questions: a) Calculate the expected return on share B. b) Find the equation of the Capital Market Line (CML). c) Build a portfolio Q with B = 0 using actions A and B. Indicate weights (interpret your result) and expected return of portfolio Q.

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