# If Intel stock has a beta of 2.16 and Boeing a beta of .69, what is 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?

Portfolio beta =

Expected return of portfolio =

https://brainmass.com/business/capital-asset-pricing-model/capital-asset-pricing-model-problem-252126

#### Solution Preview

The Capital Asset Pricing Model determines the required return on a stock (or portfolio) by correlating the risk of the investment to that of the market. Specifically, it ...

#### Solution Summary

This solution discusses the Capital Asset Pricing Model and the computation of a portfolio's beta and expected return.

$2.49