1. Consider an asset that has a beta of 1.25. If the risk-free rate is 3.25 percent and the market risk premium is 5.5 percent, calculate the expected return on the asset. 2. An asset has a beta of 0.9. The variance of returns on a market index, m2, is 90 . If the variance of returns for the asset is 120 , what proportion of the asset's total risk is systematic, and what proportion is residual risk? 3. A portfolio consists of three assets. Asset 1 has a beta of 0.85, Asset 2 has a beta of 1.3, and Asset 3 has a beta of 0.9. Asset 1 has an allocation of 50 percent, while Assets 2 and 3 each have an allocation of 25 percent. The variance of returns on a market index, m2, is 120. Calculate the variance of portfolio returns, assuming that the specific risk of the portfolio is negligible