Julie wants to create a $5,000 portfolio. She wants to invest in a high-risk stock with the hope of earning a high rate of return. The high-risk stock has a beta of 2.4 and a return of 16%. However, she wants her portfolio to have no more systematic risk than the overall market.

a) Build her a portfolio that invests in her high-risk stock as well as a risk-free asset that has a risk-free rate of 4%.

b) What is the expected return on her portfolio?