a. What is the beta of a portfolio that has 40% invested in Alphabet and 60% in McDonald's?

b. Would you invest in this portfolio if you had no superior information about the prospects for either stock? Devise an alternative portfolio with the same expected return but less risk.

c. Now repeat parts (a) and (b) with a portfolio that has 40% in Alphabet and 60% in Ford.

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U.S. Steel Disney Ford General Electric Monsanto Boeing Union Pacific Alphabet ExxonMobil Amazon Intel Pfizer Starbucks IBM McDonald's Coca-Cola Campbell Soup Walmart Newmont Mining PG&E Beta Expected Return (%) 1.85 16.0 1.42 12.9 1.31 12.2 1.20 11.4 1.19 11.3 1.01 10.1 1.00 10.0 0.96 9.8 0.94 9.6 0.93 9.5 0.91 9.4 0.90 9.3 0.79 8.5 0.59 7.1 0.51 6.6 0.49 6.4 0.47 6.3 0.26 4.8 0.24 4.7 0.23 4.6 U.S. Steel Disney Ford General Electric Monsanto Boeing Union Pacific Alphabet ExxonMobil Amazon Intel Pfizer Starbucks IBM McDonald's Coca-Cola Campbell Soup Walmart Newmont Mining PG&E Beta Expected Return (%) 1.85 16.0 1.42 12.9 1.31 12.2 1.20 11.4 1.19 11.3 1.01 10.1 1.00 10.0 0.96 9.8 0.94 9.6 0.93 9.5 0.91 9.4 0.90 9.3 0.79 8.5 0.59 7.1 0.51 6.6 0.49 6.4 0.47 6.3 0.26 4.8 0.24 4.7 0.23 4.6

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a Beta of Al is 094 and Mc is 068 There is a portfolio of ... View the full answer