$1-$ What must be the beta of a portfolio with $E(r_P)=18\%,$ if $r_f=6\%$ and $E(r_M)=14\%?$

$2-$ Are the following true or false? Explain.

a$.$ Stocks with a beta of zero offer an expected rate of return of zero.

b$.$ The CAPM implies that investors require a higher return to hold highly volatile

securities$.$

c$.$ You can construct a portfolio with beta of $.75$ by investing. $75$ of the investment budgets

in T$-$bills and the remainder in the market portfolio.