4. The Krause investment fund has $1,000,000 in total assets with $600,000 in Stock A and $400,000 in Stock B.

The required rate of return on the market is 12.5%, and the risk-free rate is 3%.

	Beta	Standard Deviation	Past Average Return
Stock A	0.6	40%	11%
Stock B	1.2	20%	13.5%

Calculate the beta of the portfolio and the required rate of return of the portfolio. Did the portfolio under-perform or over-perform? Explain.