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An Investors portfolio consists of the following stocks Stock Percentage of portfolio Beta Expected Return 1 30 0.95 21% 2 20 1.20 25% 3 5

An Investors portfolio consists of the following stocks

Stock

Percentage of portfolio

Beta

Expected Return

1

30

0.95

21%

2

20

1.20

25%

3

5

1.50

30%

4

15

0.80

15%

5

18

1.60

10%

6

12

1.90

20%

The current risk-free rate of return is 8.7% and the expected return on the market portfolio is 18%

Compute the

Expected return on the portfolio

Portfolio Beta

Required rate of return for Stock 1 and 4

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