a. What is the average beta? If a stock has a beta of 1.20, what does that imply about its risk relative to the market?

b. What is the Security Market Line (SML)? How is beta related to a stock's required rate of return? c. Your retirement fund consists of a $6,000 investment in each of 10 different common stocks. The portfolio's beta is 1.10. Suppose you sell one of the stocks with a beta of 0.8 for $5,000 and use the proceeds to buy another stock whose beta is 1.5. Calculate your portfolio's new beta?