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5. (a) Amy has $80,000 invested in a stock with a beta of 0.4 and another $60,000 invested in a stock with a beta of

5. (a) Amy has $80,000 invested in a stock with a beta of 0.4 and another $60,000 invested in a stock with a beta of 1.8. If these are the only two investments in her portfolio, what is her portfolios beta?

(b) Suppose, the 3-month t-bill rate is currently 3% and the expected return on the market portfolio is 9%. What is the required return on Amys portfolio of these two stocks?

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