(Portfolio beta and CAPM) You are putting together a portfolio made up of four different stocks....

 

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(Portfolio beta and CAPM) You are putting together a portfolio made up of four different stocks. However, you are considering two possible weightings: a. What is the beta on each portfolio? b. Which portfolio is riskier? c. If the risk-free rate of interest were 3 percent and the market risk premium were 7 percent, what rate of return would you expect to eam from each of the portfolios? a. The beta on the first portfolio is. (Round to three decimal places.) KILD Home A1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Paste 29 30 31 32 Excel File Edit View Insert Format Tools Data Window Help A Asset A B C D Ready AutoSave OFF Insert Draw Page Layout X Beta B Calibri B I U fx 2.4 12% 0.9 12% 0.45 38% -1.7 38% V C Portfolio Weightings First Portfolio Accessibility: Good to go 11 Formulas V V D A^ A A Second Portfolio 38% 38% 12% 12% APR 2 V Data E Review F G m ♫ View (a H data-4_2_2023-7_58 PM Automate ab I tv N Tell me General $ % V J K V 0 .00 .00 →0 L A Conditional Format Formatting as Table O M V N Cell Styles O P Insert v Delete v Format v W Q WE R J™ X S Comments V Sort & Filter Sun Apr 2 8:00 PM Microsoft Excel O. Find & Select T Analyze Data U %D Share V (Portfolio beta and CAPM) You are putting together a portfolio made up of four different stocks. However, you are considering two possible weightings: a. What is the beta on each portfolio? b. Which portfolio is riskier? c. If the risk-free rate of interest were 3 percent and the market risk premium were 7 percent, what rate of return would you expect to eam from each of the portfolios? a. The beta on the first portfolio is. (Round to three decimal places.) KILD Home A1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Paste 29 30 31 32 Excel File Edit View Insert Format Tools Data Window Help A Asset A B C D Ready AutoSave OFF Insert Draw Page Layout X Beta B Calibri B I U fx 2.4 12% 0.9 12% 0.45 38% -1.7 38% V C Portfolio Weightings First Portfolio Accessibility: Good to go 11 Formulas V V D A^ A A Second Portfolio 38% 38% 12% 12% APR 2 V Data E Review F G m ♫ View (a H data-4_2_2023-7_58 PM Automate ab I tv N Tell me General $ % V J K V 0 .00 .00 →0 L A Conditional Format Formatting as Table O M V N Cell Styles O P Insert v Delete v Format v W Q WE R J™ X S Comments V Sort & Filter Sun Apr 2 8:00 PM Microsoft Excel O. Find & Select T Analyze Data U %D Share V

Answer rating: 100% (QA)

To answer part a we need the beta of each portfolio which is a measure of the risk of the portfolio in comparison to the market For a portfolio the be... View the full answer