Consider a portfolio consisting of the following threestocks:

	Portfolio Weight	Volatility	Correlation with the Market Portfolio
HEC Corp	0.22	11%	0.34
Green Midget	0.37	26%	0.65
AliveAndWell	0.41	15%	0.47

The volatility of the market portfolio is 10%and it has an expected return of 8%. Therisk-free rate is 3%.

a. Compute the beta and expected return of each stock.

b. Using your answer from part (a),calculate the expected return of the portfolio.

c. What is the beta of theportfolio?

d. Using your answer from part (c),calculate the expected return of the portfolio and verify that it matches your answer to part (b).