- Rate Have To Be For The Two Stocks To Be Correctly Priced 20 Using Capm L04 A Stock Has A Beta Of 1 35 And An Expect 1 (45.36 KiB) Viewed 102 times
rate have to be for the two stocks to be correctly priced? 20. Using CAPM (L04] A stock has a beta of 1.35 and an expect
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rate have to be for the two stocks to be correctly priced? 20. Using CAPM (L04] A stock has a beta of 1.35 and an expect
rate have to be for the two stocks to be correctly priced? 20. Using CAPM (L04] A stock has a beta of 1.35 and an expected return of 16 percent. A risk free asset currently earns 4.8 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 0.95, 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 2.70, what are the portfolio weights? How do you interpret the weights for the two assets in this case? Explain.