A 1 2 Beta 1.3 1.8 3 percentage in portfolio 25% 40% 35% 4 Market portfolio's expected return 20% 6% 5 Risk free rate 6 7 Part A. Use CAPM to calculate each asset's expected return, and indicate whether they are undervalued or overvalued 8 Asset A Asset B Asset C 9 Expected return 10 11 Part B. Calculate the portfolio beta and portfolio expected return 12 Portfolio Beta 13 Portfolio expected return 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 #4 #6 #7 Ready #1 #2 B C Asset A #3 D Asset B #5 E Asset C 3.3 F H #8