Question: Question 5 1 pts A stock has an expected return of 0.13, its beta is 1.65, and the expected return on the market is 0.08.
Question 5 1 pts A stock has an expected return of 0.13, its beta is 1.65, and the expected return on the market is 0.08. What must the risk-free rate be? (Hint: Use CAPM) Enter the answer in 4 decimals e.g. 0.0123. Question 6 1 pts You own a portfolio equally invested in a risk-free asset and two stocks (If one of the stocks has a beta of 1.73 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? (Hint: Remember that the market has a Beta=1; also remember that equally invested means that each asset has the same weight- since there are 3 assets, each asset's weight is 1/3 or 0.3333). Enter the answer with 4 decimals (e.g. 1.1234) Question 7 1 pts A portfolio has 236 shares of Stock A that sell for $21.26 per share and 354 shares of Stock B that sell for $53.16 per share. What is the portfolio weight of Stock A? Enter the answer in 4 decimals (e.g. 0.3044)
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