Exercise 3. A stock has a beta of 1.23, and its expected return is 11.7%. The risk-free return is 3.5%. (a) What is the expected return of a portfolio equally invested in the two assets? I (b) If the portfolio composed of the two assets has a beta of 0.7, what are the portfolio weights? (c) If the portfolio composed of the two assets has an expected return of 9%, what is its beta? (d) If the portfolio composed of the two assets has a beta of 2.46, what are the portfolio weights? How do you interpret these? Exercise 4.