2. The only component of the CAPM equation that relates specifically to a company is

a)b_X

b)k_M

c)k_RF

d)(k_M - k_RF)

3. The CAPM asserts that the only company specific factor affecting required return is

a)market risk

b)the risk-free rate

c)investment risk

rd)isk aversion

4. A portfolio is characterized by the following

Stock	$'s invested	Expected Return	Beta
X	$2,000	15%	2
Y	$8,000	12%	1.6
Z	$2,000	8%	1.2

a)	Calculate the portfolio's expected return.
b)	Calculate the beta of the portfolio.
c)	If the return on the market is 10% and the risk-free rate is 3%, what is the required return on the portfolio?