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A stock has a beta of 1.2 and an expected return of 16 percent. A risk-free asset currently earns 4.7 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. Omit the "%" sign in your response.)
Expected return _%
b. If a portfolio of the two assets has a beta of .99, what are the portfolio weights? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Portfolio Weight xS _%?
xrf_ %?
c. If a portfolio of the two assets has an expected return of 9.75 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 4 decimal places.)
Beta _?
d. If a portfolio of the two assets has a beta of 1.30, what are the portfolio weights? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Porfolio Weight xS _%?
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