risk-free rate be? 17. Using CAPM. A stock has a beta of 1.23 and an expected return of 4 11.7 percent. A risk-free asset currently earns 3.5 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? If a portfolio of the two assets has a beta of .7, what are the portfolio weights? If a portfolio of the two assets has an expected return of 9 percent, what is its beta? If a portfolio of the two assets has a beta of 2.46, what are the portfolic weights? How do you interpret the weights for the two assets in this case? Explain. b. c. d. 18. Using the SML. Asset W has an expected return of 11.4 percent and a beta of 1.18. If the risk-free rate is 3.15 percent, complete the following table for portfolios of Asset W and a risk-free asset. Illustrate the n nortfolin expected return and portfolio beta by