2 Stock 1 2 3 4 5 Percentage of portfolio % 20 30 15 25 10 Beta 1.0 0.85 1.2 0.6 1.6 Expected return% Question 3 Explain investor's "required rate of return". 16 14 20 12 24 a. Calculate the expected rate return of your portfolio. b. Calculate the portfolio beta. c. Given the Risk-free rate is 7% and the expected return on the market portfolio is 15.5%, estimate the required rate of return for stock 1 and 2. 4 Marks 2 Marks 2 Marks TOTAL: 10 MARKS 2 Marks