Problem 11.17 – a. Expected return b. Weight of stock c. Beta d. weight of risk-free

Essentials of Corporate Finance

Ross, Westerfield, and Jordan

10th Edition

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Given a stock's beta, expected return and the risk-free rate, you are asked to calculate the expected return on a portfolio that is equally invested in the two assets. Then in part b, you are asked to figure out the portfolio weights that would yield a targeted beta. In part c, you are asked to figure out the beta and finally, in part d, you are asked to calculate the portfolio weights.

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