1. Your client decides to invest $60 million in Flama and $40 million in Blanca stocks. The risk-free rate is 2% and themarket risk premium is 4%. The beta of the Flama Stock is 2, and the beta of the Blanca stock is 4.
   1. What are the weights for this portfolio?
   2. What is the portfolio beta?
   3. What is the required return of the portfolio?

Answer rating: 100% (QA)

To calculate the weights for the portfolio we use the proportion of each investment ... View the full answer