Kelly has investments with the following characteristics in her portfolio:

Investment in	Beta	Amount invested
Stock Q	1.5	$50,000
Stock R	2	$40,000
Stock S	0.8	$60,000

Given the risk free rate of 2% and the market return of 7%, what is the expected rate of return of Kellys investment portfolio?

2. Suppose risk-free rate of return = 2%, market return = 9%, and Stock Bs return = 15%. Calcuate Stock Bs beta. If Stock Bs beta were 0.8, what would be its new rate of return?