1. What is the Beta for the following portfolio?

Stock Investment ($): A= $25,000 B= $10,000 C= $15,000 D= $40,000 E= $35,000

Beta 0.75 0.95 1.25 1.50 0.00

2. What is the portfolio beta if 60% of your money is invested in the market portfolio and the remainder is invested in a risk-free asset?

3. The _____ the beta coefficient, the _____ the required rate of return on average.

-higher; higher

-higher; lower

-lower; higher

-lower; lower or higher

-lower; more risky