Consider a portfolio consisting of the following three stocks Garanti, Akbank and bank:

Stocks

Portfolio weight

Volatility

Correlation with the market portfolio

Garanti

0.18

13%

0.50

Akbank

0.24

17%

0.65

bank

0.58

18%

0.45

The volatility of the market portfolio is 9% and it has an expected return of 12%. The risk-free rate is 4%.

a) What is the beta of the portfolio?

b) What is the expected return of the portfolio?