Question

Consider the following two securities X and Y

X y
Return- 20.0% Return- 10.0%
Standard Deviation- 20.0% Standard Dev 30%
Beta- 1.50 Beta- 1.0

Risk-free asset
Return- 5.0%


Using the data from the table, what is the portfolio expected return and the portfolio beta if you invest 35 percent in X, 45 percent in Y, and 20 percent in the risk-free asset?

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