Question: finance is too hard for me 20. Using CAPM A stock has a beta of 1.25 and an expected return of 13 percent. A risk-free

finance is too hard for me 20. Using CAPM A stock

finance is too hard for me

20. Using CAPM A stock has a beta of 1.25 and an expected return of 13 percent. A risk-free asset Currently earns 26 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? b. If a portfolio of the two assets has a beta of 5, what are the portfolio weights? c. If a portfolio of the two assets has an expected return of 10 percent, what is its beta? d. If a portfolio of the two assets has a beta of 2.50, what are the portfolio weights? How do you inter- pret the weights for the iwo assets in this case? Explain

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