a$.$ Calculate the betas for portfolios A and $B.$

b$.$ If the risk$-$free rate is $2\mathrm{.}3\%$ and the market return is $7\mathrm{.}7\%,$ calculate the required return for each portfolio using the CAPM.

a$.$ The beta of portfolio $A$ is

$($Round to three decimal places.$)$

The beta of portfolio $B$ is

$($Round to three decimal places.$)$

b$.$ The required return of portfolio $A$ is

$\%.($Round to two decimal places.$)$

The required return of portfolio $B$ is

$\%.($Round to two decimal places.$)$

c$.$ The weighted return of portfolio $A$ is

$\%.($Round to two decimal places.$)$

The weighted return of portfolio $B$ is

$\%.($Round to two decimal places.$)$

Since the market return is expected to be $(1)$

$,$ he should probably choose the portfolio with the higher beta, portfolio $(2)$

$($Select from the drop$-$down menus.$)$

$1$: Data Table

$($Click on the icon here $$ in order to copy the contents of the data table below into a spreadsheet.$)$

$2$: Data Table

$($Click on the icon here $$ in order to copy the contents of the data table below into a spreadsheet.$)$

$(1)$ positive

$(2)A$

negative

B

unchanged

A or B