5. A mutual fund manager holds the following portfolio: Beta Stock 1 2 Investment $ 2 million $ 4 million $ 3 million $ 1 million 3 4 15 1.3 1.1 0.8 a Calculate the portfolio beta, bp b. Assume the risk-free rate is 2% and the market risk premium is 9.5%. Use the CAPM equation to calculate the portfolio return, Rp c. Assume the mutual fund manager is expecting an economic downturn and decides to sell Stock 1 and use half the proceeds to invest in additional shares of Stock 4 and the other half of the proceeds to invest in Treasury bills which are considered to be risk-free. Calculate the resulting portfolio beta, bp