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Stock J has a beta of 1.23 and an expected return of 13.25 percent, while Stock K has a beta of .8 and ar expected return of 11.40 percent. You want a portfolio with the same risk as the market. Requirement 1: What is the portfolio weight of each stock? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) Stock J Stock K Requirement 2: What is the expected return of your portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Expected return of the portfolio 1%

Stock J has a beta of 1.23 and an expected return of 13.25 percent, while Stock K has a beta of .8 and ar expected return of 11.40 percent. You want a portfolio with the same risk as the market. Requirement 1: What is the portfolio weight of each stock? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) Stock J Stock K Requirement 2: What is the expected return of your portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Expected return of the portfolio 1%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Stock J has a beta of 1.23 and an expected return of 13.25 percent, while Stock K has a beta of .8 and an expected return of 11.40 percent. You want a portfolio with the same risk as the market. Requirement 1: What is the portfolio weight of each stock? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) Stock J Stock K Requirement 2: What is the expected return of your portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Expected return of the portfolio 1%
Transcribed Image Text:Stock J has a beta of 1.23 and an expected return of 13.25 percent, while Stock K has a beta of .8 and an expected return of 11.40 percent. You want a portfolio with the same risk as the market. Requirement 1: What is the portfolio weight of each stock? (Do not round intermediate calculations. Round your answers to 4 decimal places (e.g., 32.1616).) Stock J Stock K Requirement 2: What is the expected return of your portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Expected return of the portfolio 1%
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