FIN220 SEM 181 4. Assuming the CAPM approach is appropriate, compute the required rate of return for each of the following stocks, given a risk-free of 7% and the expected return for the market portfolio of 13%; Stock Beta 1.5 1.0 2.0 1.3 5. Selena invests the following sum of money in common stock having expected returns as Common Stock Amount Expected Invested in Return Beta of Stock 0.6 0.8 0.85 0.5 1.1 0.65 0.9 WOOPS 5,0000.14 KBOOM JUDY 0.16 0.17 0.13 SPROUT45000.20 10,000 6,000 8,000 UPDWN RNGG 17,500 10.15 EIEIO 9,000 0.18 a) What is the expected return on her portfolio based on the amount invested above? b) Calculate the systematic risk, B of the portfolio. c) Does the portfolio have more or less systematic risk compared to the average market d) If return on the market (Rm) is 14% and the risk free rate (R) is 4%, what would be the e) If Selena wants to get 12% return from this portfolio, is this the appropriate portfolio for If she still wants to invest in this portfolio what should she do in terms of adjusting the portfolio? return of the portfolio according to Capital Asset Pricing Model (CAPM)? her? Explain your reason using your answer in (A) and (D). weight of the stock? Give your answer based on the amount invested in UPDWN and SPROUT stocks