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Mr. Aly has made following combination of investment in a stock market with the assigned beta value. Firms Rate of investment Beta A 0.50 0.80

Mr. Aly has made following combination of investment in a stock market with the assigned beta value.

Firms Rate of investment Beta

A 0.50 0.80

B 0.10 1.2

C 0.25 0.3

D 0.15 1.5

Required

a. Calculate portfolio beta value for Mr. Aly

b. Assume that the risk-free rate is 7% and that the market risk premium is 8%. What rate of return Mr. Aly expecting from his portfolio investment?

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