Homework 6.docx - 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

Homework 6.docx - A stock has a beta of 1.22 and an...

This preview shows page 1 - 2 out of 2 pages.

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? (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? (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? (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? (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.) You have a portfolio with the following: Stock Number of Shares Price Expected Return W 750 $ 47 14% X 650 24 18 Y 400 60 16 Z 625 45 17 What is the expected return of your portfolio?
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read both pages?

  • Fall '19
  • Dmitrii L. Maslov

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors