Question

Asked Nov 24, 2019

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If a portfolio of the two assets has a beta of .99, what are the portfolio weights? **(Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)**

Weight of stock | |

Risk-free weight | |

Step 1

Hi. Since there is no information given regarding the beta of stock, we are randomly assuming the beta as 1.40. Kindly replace with the original beta values given.

Step 2

**Calculation of Portfolio Weights:**

The weight of stock is **70.71%** and the weight of risk-free asset is **29.29%**.

**Excel Spreadsheet:**

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