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What is the expected return of boeing stock

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Suppose Intel stock has a beta of 1.8, whereas Boeing stock has a beta of 1.2. If the risk-free interest rate is 5% and the expected return of the market portfolio is 15%, according to the CAPM,

Question a. What is the expected return of Intel stock?

Question b. What is the expected return of Boeing stock?

Question c. What is the beta of a portfolio that consists of 70% Intel stock and 30% Boeing stock?

Question d. If you expect that Intel stock to have a return of 21% and Boeing stock to have a return 18% over next year, based on your answer in part a and part b, which stock should you buy and which stock should you sell? Why?

Reference no: EM132633873

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