Suppose that the S&P 500, with a beta of 1.0, has an expected return of 13% and T-bills provide a risk-free return of 4%. 13 a. What would be the expected return and beta of portfolios constructed from these two assets with weights.

 

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b. How does expected return vary with beta? b. How does expected return vary with beta?

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To calculate the expected return and beta of portfolios constructed from the SP 500 and Tbills with ... View the full answer