An investor has a portfolio of two securities, stock XYZ and an exchange traded fund (ETF) that tracks the ASX200 and charges negligible fees. Assume that the ASX200 ETF is the market portfolio. The following table summarises the investors' holdings. Assume that returns are effective annual rates or net discrete returns.

Portfolio Details
	XYZ	ASX200 ETF
Investment	$40,000	$60,000
Expected return	6% pa	7% pa
Total standard deviation	30% pa	25% pa
Beta	?	1
Correlation of returns between XYZ and ASX200	0.65

Do not enter your answers as percentages. Provide all answers as decimals correct to at least 6 decimal places. So for example if your answer is 1.23456789%, write 0.0123456789.

Question a (2 marks): What is the portfolio's total expected return pa?

Question b (2 marks): What is the portfolio's total variance of returns pa?

portfolio variance:

Question c (2 marks): What is the beta of stock XYZ?

Question d (2 marks): What is the beta of the portfolio?

Question e (2 marks): What is the portfolio's systematic variance of returns pa?

Question f (2 marks): Assuming that stock XYZ and the ETF are fairly priced, calculate the risk free rate.