B. A firm wishes to estimate the beta of a portfolio that consists of two assets X and Y. The investment manager of the firm has gathered the following information on the two assets: Securities X Rate of Return Standard Deviation Beta 20% Y 10% Risk free asset 5% Calculate: 20% 30% 1.5 1.0 i. the beta of the portfolio if 75% of the funds are invested in Y and 25% in X. (2 marks) ii. the portfolio expected return and the portfolio beta if you invest 35 % in X, 45% in Y, and 20 percent in the risk-free asset? (4 marks) iii. Assuming the CAPM applies, if the market's expected return is 13 percent, the risk- free rate is 8 percent, and stock X's required rate of return is 16 percent, what is the stock's beta coefficient? (3 marks)