Question: Use the following information to answer the questions Security Beta Standard Deviation Expected return S&P 500 Risk-free security Stock A Stock B Stock C 1.0
Use the following information to answer the questions
| Security | Beta | Standard Deviation | Expected return |
| S&P 500 Risk-free security Stock A Stock B Stock C | 1.0 0.0 0.6 ( ) 1.2 | 20% 0% 15% 30% 25% | 8.0% 4.0% ( )% 12.0% ( )% |
- A complete portfolio is composed of the risk-free security and a risky portfolio, Q, constructed with two risky securities, X and Y. Given the risk-free rate of 4%. X has an expected return of 10%, and Y has an expected return of 20%.
a.Given the expected return of 14% for the risky portfolio Q, what are the weights for X and Y, respectively?
b. You would like to form a complete portfolio with the expected return of 19%. What are the wights for the risk-free security and the risky portfolio Q, respectively?
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