ABC Company is attempting to evaluate three possible portfolios, using beta to compare the risks. Related data has shown in the following table.

Assets		1	2	3	4	5
Asset beta		1.25	0.75	1.15	1.12	0.98
Portfolio weights	Portfolio X	30%	10%	20%	20%	20%
	Portfolio Y	10%	30%	10%	10%	40%
	Portfolio Z	20%	15%	20%	15%	30%

b) ABC Company is considering to invest in the portfolio with the highest risk (On the basis of the calculation in part a). At the moment, the risk-free rate of return is 7.3 %, and the return on the market portfolio of assets is 9.8%. ABC Company believes that this investment will earn an annual rate of return of 10 %. Use the capital asset pricing model to find the required return on this investment. Would you recommend this investment? Also assume that the market return drops by 0.1%. Would this drop have an impact on your recommendation?