12- (2 points) Stock A has a beta of 1.5 and an expected return of 10%. Stock B has a beta of 1.1 and an expected return of 8%. The current market price for stock A is $20 and the current market price for stock B is $30. The expected return for the market is 7.5%. What is the expected return on a portfolio consisting of 70 shares of stock A, 80 shares of stock B and $1,500 worth of T-bills.

1. 6.1%
2. 6.6%
3. 7.0%
4. 7.8%
5. 8.2%