8.2 Suppose you are managing a $4 million investment fund. The funds portfolio consists of four stocks with the following investments and betas:

a. Calculate the portfolio weight for each individual stock. b. Calculate the portfolio beta. c. If the markets required rate of return is 7% and the risk-free rate is 2%, what is the funds required rate of return?

Beta 1.2 -0.6 1.5 0.5 Stock Investment 200,000 400,000 1,400,000 2,000,000