If the market expected rate of return is 12% and the risk-free rate is 5%, use this data to answer the following given what we discussed about risk and return: a) (6 points) Assume Stock A has a beta of 1.2 and Stock B has a beta of 0.9, what are the expected rates of return for each stock? Stock A Stock B b) (8 points) What would the beta of a portfolio in which you had 50% or your money in Stock A, 20% of your money in Stock B, and 30% of your money in the risk-free rate? What would be the expected return of that portfolio? Beta of the Portfolio = Expected Return of the Portfolio = c) (6 points) Consider a security which trades in an efficient market. If the expected return on the security is 14.4%, the standard deviation of return of the market is 10%, the risk-free rate is 4%, the standard deviation of return of the security is 20%, and the expected return on the market is 12%, what would you expect the beta of the security to be? Answer: