Intel and Boeing's stock expected return
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Suppose Intel stock has a beta of 2.16 whereas Boeing stock has a beta of 0.69. If the risk-free interest rate is 4% and the expected return of the market portfolio is 10%, what is the expected return of a portfolio that consists of 60% Intel stock and 40% Boeing stock, according to the CAPM?
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Solution Summary
The solution determines what intel's and boeing's stock expected return is with different betas. The CAPM is analyzed.
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Ri=Rf+Beta*(Rm-Rf)
Expected return on Intel R intel = ...
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