c.
Calculating return of market using CAMP Model
Rm = (0.11 - 0.024)/1.05 + 0.024
Rm = 10.59%
Portfolio Beta = (0.07 - 0.024)/(0.1059 - 0.024)
Portfolio beta = 0.56
d.
Weight of stock be w,
2.10 = w1.05
w = 200%
Weight of stock = 200%
Weight of risk free asset = -100%
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