A share has a beta of 1.4 and an expected return of 16%. A risk-free asset currently earns 6.25%.

1. What is the expected return on a portfolio that is equally invested in the two assets? (4 Mark)
2. If a portfolio of the two assets has a beta of 0.8, what are the portfolio weights? (4 Mark)
3. If a portfolio of the two assets has an expected return of 12%, what is its beta? (5 Mark)
4. If a portfolio of the two assets has a beta of 2.80, what are the portfolio weights? (4 Marks) How do you interpret the weights for the two assets in this case? Explain. (3 Mark)