I need to know how to solve the portfolio beta 8-17 problem using the expected portfolio beta formula in the book rp=w1b1+w2+b2. W is the weights bring the percentage of the total portfolio invested in each asset. B is the beta.

ial Assets on a The expected return on a portfolio, Fp is the weighted average of the age of of the expected the pencem 8-3A EXPECTED PORTFOLIO RETURNS returns of the individual assets in the portfolio, with the weights bein tage of the total portfolio invested in each asset n ns on he Wir i-1 ere f is the expected return on the ith stock; the w's are the stocks'w percentage of the total value of the portfolio invested in each stock;aor number of stocks in the portfolio. n each stock; and N is Table 8.4 can be used to implement the equation. Here we assume analyst estimated returns on the four stocks shown in column 1 for the as shown in column 2. Suppose further that you had $100,000 and invest $25,000 or 25% of the total, in each stock. You could multiply each percentage weight as shown in column 4 by its expected return; obtain the terms in column 5, and then sum column 5 to calculate the expected ror hat an comung year you planned produ return, 7.875%. If you added a fifth stock with a higher expected return, the portfolio's return. The key point to remember is that the expected return on a portfolio is a teight 1. The expected returns in column 2 would be based on a study of some typ return would increase, and vice versa if you added a stock with a lower expect average of expected returns on the stocks in the portfolio. Several additional points should be made: but they would still be essentially subjective and judgmental because differ analysts could look at the same data and reach different conclusions. Therefore, this type of analysis must be viewed with a critical eye. Nevertheless, it is useful, indeed necessary, if one is to make intelligent investment decisions 2. If we added companies such as U.S. Steel Corp. and GM, which are gene considered to be relatively risky, their expected returns as estimated by marginal investor would be relatively high; otherwise, investors would them, drive down their prices, and force the expected returns above the returns on safer stocks. 3. After the fact and a year later, the actual realized rates of return, r,on individual stocks-the f, or "r-bar," values-would almost certainly b different from the initial expected values. That would cause the porti