Asset W has an expected return of 13.8 percent and a beta of 1.3. If the risk-fr
ID: 2693081 • Letter: A
Question
Asset W has an expected return of 13.8 percent and a beta of 1.3. If the risk-free rate is 5 percent, complete the following table for portfolios of Asset W and a risk-free asset. (Do not include the percent sign (%). Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 2 decimal places on portfolio expected return. (e.g., 32.16). Round your answers to 3 decimal places on portfolio beta. (e.g., 32.161))
Percentage of Portfolio Portfolio Portfolio in Asset W Expected Return Beta 0% % 25 % 50 % 75 % 100 % 125 % 150 %Explanation / Answer
Beta of risk free = 0
Return Beta
for weight of 0% = 3.8% 0
25% 7.2% 0.325
50% = 9.4% 0.65
75% = 11.6% 0.975
100% = 13.8% 1.3
125% = 16% 1.625
150% = 18.2% 1.95