1.

2.

Both assets B and C plot on the SML. Asset B has a beta of 1.3 and an expected return of 13.1%. Asset C has a beta of .50 and an expected return of 7.50%. If you wish to hold a portfolio consisting of assets B and C, and have a portfolio beta equal to 1.0, what proportion of the portfolio must be in asset B ? 1) 0.75 2) 0.375 3) 0.625 4) 0.50 Use the following information to answer the two questions below. You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. Enter answer using 4 decimals. Do not use or enter the \%. For example, if your answer is 3.480% enter 0.0350 ; if your answer is 0.12013 then enter 0.1201 What is the expected return of a portfolio with equal investments in each asset? A What is the variance of the portfolio with equal investments in each asset? A)