Suppose Intel stock has a beta of 0.84, whereas Boeing stock has a beta of 1.29. If the risk-free interest rate is 5.6% and the expected return of the market portfolio is 12.8%, according to the CAPM. a. What is the expected return of Intel stock? b. What is the expected return of Boeing stock? c. What is the beta of a portfolio that consists of 70% Intel stock and 30% Boeing stock? d. What is the expected return of a portfolio that consists of 70% Intel stock and 30% Boeing stock? (There are two ways to solve this.)

Suppose Intel stock has a beta of 0.84, whereas Boeing stock has a beta of 1.29. If the risk-free interest rate is 5.6% and the expected return of the market portfolio is 12.8%, according to the CAPM. a. What is the expected return of Intel stock? b. What is the expected return of Boeing stock? c. What is the beta of a portfolio that consists of 70% Intel stock and 30% Boeing stock? d. What is the expected return of a portfolio that consists of 70% Intel stock and 30% Boeing stock? (There are two ways to solve this.)

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter6: Risk And Return

Section: Chapter Questions

Problem 14P

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