Calculate the expected return on a portfolio that contains 30% of a stock with an expected return of -1% and 70% of a stock with an expected return of 12%

Finance Dec 19, 2020

Calculate the expected return on a portfolio that contains 30% of a stock with an expected return of -1% and 70% of a stock with an expected return of 12%. (Enter your answer as a percentage rounded to 2 decimal places. For example, enter 1.53% instead of .0153.) Your Answer: Answer units Question 25 (0.8 points) The risk-free rate is 1.9% and the market risk premium is 54% A stock has a beta of 0.0, what is its expected retum of the stock? (Enter your answers as a percentage. For example, ruter 8.43% instead of 0.0843) Your Answer:

Expert Solution

Weight of Stock 1 = 0.3

Weight of Stock 2 = 0.7

return of Portfolio = Weight of Stock 1*return of Stock 1+Weight of Stock 2*return of Stock 2

return of Portfolio = -1*0.3+12*0.7

return of Portfolio = 8.1

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