A. Suppose you invest $400,000 in Treasury Bills that have a yield to maturity of 4% and $600,000 in the market portfolio with an expected return of 14%. What is the expected return on your portfolio? Please show and explain.

B. Given the information in part (A), what is the required expected return for an investment in a stock that has a beta of 0.7? Please show and explain.

C. Given the information in part (A), suppose the purchase of Dell Computer stock has an actual expected return (expected IRR) of .08 and a beta of .5. Would it be wise to purchase Dell stock? Please explain why or why not.