Calculate the weighted average Beta of a portfolio with the following securities. Then, using the Capital Asset Pricing Model (CAPM), calculate the expected return of a portfolio composed of the four securities:

Beta Weight in portfolio

Security 1 1.3 0.20

Security 2 0.5 0.30

Security 3 1.5 0.25

Security 4 0.8 0.25

Expected return for S&P 500 = 15 percent.

Expected annualized return for 90-day T-bill = 5 percent.

A.	15.25%
	B.	16.50%
	C.	14.85%
	D.	There is not enough information to answer the question.
	E.	None of the above