You are putting together a portfolio made up of four different stocks. However, you are considering two possible weightings:  

Portfolio Weightings
Asset	Beta		First Portfolio	Second Portfolio
A	2.00		15%	35%
B	1.10		15%	35%
C	0.55		35%	15%
D	−1.60		35%	15%

.

a.  What is the beta on each portfolio?

b.  Which portfolio is riskier?

c.  If the risk-free rate of interest were

4.5

percent and the market risk premium were

7

percent,

what rate of return would you expect to earn from each of the portfolios?