Answer:
6.5%
Explanation:
Data given in the question
Beta of the stock = 0.9
Expected return = 9%
A risk-free asset = 4%
By considering the above information, the expected return on a portfolio is
= Risk - free asset × equally basis + expected rate of return × equally basis
= 4% × 50% + 9% × 50%
= 2% + 4.5%
= 6.5%
Since we have to find out the expected return on equally invested so we considered the risk free asset and the expected rate of return
Therefore we ignored the beta of the stock
