You are putting together a portfolio made up of four different stocks. However, you are considering...

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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 4.5 percent and the market risk premium were 6.5 percent, what rate of return would you expect to earn from each of the portfolios? a. The beta on the first portfolio is The beta on the second portfolio is b. Which portfolio is riskier? (Select the best choice below.) (Round to three decimal places.) (Round to three decimal places.) OA. The second portfolio because the beta is smaller. B. The second portfolio because the beta is larger. OC. The first portfolio because the beta is larger. OD. The first portfolio because the beta is smaller. **** Data table Asset A B C Beta 2.10 0.80 0.60 - 1.70 D (Click on the icon in order to copy its contents into a spreadsheet.) c. If the risk-free rate of interest were 4.5% and the market risk premium were 6.5%, then the rate of return on the first portfolio is expected to be If the risk-free rate of interest were 4.5% and the market risk premium were 6.5%, then the rate of return on the second portfolio is expected to be Portfolio Weightings First Portfolio 12% 12% 38% 38% Print Done %. (Round to two decimal places.) %. (Round to two decimal places.) Second Portfolio 38% 38% 12% 12% 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 4.5 percent and the market risk premium were 6.5 percent, what rate of return would you expect to earn from each of the portfolios? a. The beta on the first portfolio is The beta on the second portfolio is b. Which portfolio is riskier? (Select the best choice below.) (Round to three decimal places.) (Round to three decimal places.) OA. The second portfolio because the beta is smaller. B. The second portfolio because the beta is larger. OC. The first portfolio because the beta is larger. OD. The first portfolio because the beta is smaller. **** Data table Asset A B C Beta 2.10 0.80 0.60 - 1.70 D (Click on the icon in order to copy its contents into a spreadsheet.) c. If the risk-free rate of interest were 4.5% and the market risk premium were 6.5%, then the rate of return on the first portfolio is expected to be If the risk-free rate of interest were 4.5% and the market risk premium were 6.5%, then the rate of return on the second portfolio is expected to be Portfolio Weightings First Portfolio 12% 12% 38% 38% Print Done %. (Round to two decimal places.) %. (Round to two decimal places.) Second Portfolio 38% 38% 12% 12%

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a Beta of portfolio Beta of asset A Weightage of asset A in first portfolio Beta of asset B Weightag... View the full answer