4. Based on the following information Calculate State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B 0.05 -0.17 0.08 0.12 0.13 0.29 Recession Normal Boom 0.20 0.55 0.25 a) The expected return of Stock A (7.5 points) b) The expected return of Stock B (7.5 points) c) The expected return of Portfolio where you invest $35,000 in Stock A and $45,000 in Stock B (5 points) d) Suppose Stock A has a beta of 0.8 and Stock B has a beta of 1.3. If you invest $35,000 in Stock A and $45,000 in Stock B, what is the beta of this portfolio? (5 points) e) Expected return on the market (Rm. ) is 10% and the risk-free (r.) is 4%. What must the the expected return on the portfolio according to CAPM? (Use the beta you have calculated in section d) for CAPM) (5 points)