(Solution Download) A stock has a beta of 1.35 and an expected return of 16%. A risk-free asset currently earns 4.8%. 1.

A stock has a beta of 1.35 and an expected return of 16%. A risk-free asset currently earns 4.8%. 1. What is the expected return on a portfolio that is equally invested in the two assets? 2. If a portfolio of the two assets has a beta of 0.95, what are the portfolio weights? 3. If a portfolio of the two assets as an expected return of 8%, what is its beta? 4. If a portfolio of the two assets has a beta of 2.70, what are the portfolio weights? How do you interpret the weights for the two assets in this case? Explain.