Question Details
Stock J has a beta of 1.22 and an expected return of 13.26
percent, while Stock K has a beta of 0.77 and an expected return of
10.2 percent. You want a portfolio with the same risk as the
market.

Requirement
1: 
What is the portfolio weight of
each stock? (Do not round intermediate calculations. Round
your answers to 4 decimal places (e.g., 32.1616).) 
Stock J 

Stock K 

Requirement
2: 
What is the expected return of your portfolio?
(Do not round intermediate calculations.
Enter your answer as a percentage rounded to 2
decimal places (e.g., 32.16).)

Expected return of
the portfolio 
% 
You have a portfolio with the
following: 
Stock  Number of
Shares  Price  Expected
Return 
W  875
 $ 52
 14%

X  775
 29
 18

Y  525
 65
 16

Z  750
 50
 17

Required: 
What is the expected return of
your portfolio? (Do not round intermediate
calculations. Enter your answer as a percentage
rounded to 2 decimal places (e.g.,
32.16).) 
Expected return of
the portfolio 
% 
You want to create a portfolio equally as risky as the market,
and you have $500,000 to invest. Information about the possible
investments is given below:

Asset 
Investment  Beta  
Stock A  $  133,000
 .78

Stock B  $ 
147,000  1.23

Stock C  1.38
 
Riskfree asset  
Requirement
1: 
How much will you invest in Stock C? (Do not round
intermediate calculations. Round your answer to 2 decimal places
(e.g., 32.16).)

Investment in Stock
C 
$ 
Requirement
2:  
How much will you invest in the riskfree asset? (Do not
round intermediate calculations. Round your answer to 2 decimal
places (e.g., 32.16).)

Investment in
riskfree asset 
$ 
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This question was answered on: Dec 08, 2020
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STATUSAnswered
QUALITYApproved
DATE ANSWEREDDec 08, 2020
EXPERTTutor
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