P5.29 Jeanne Lewis is attempting to evaluate two possible portfolios consisting of the same five

assets but held in different proportions. She is particularly interested in using beta to com- pare the risk of the portfolios and, in this regard, has gathered the following data.

Portfolio Weights Asset Asset Beta Portfolio A Portfolio B 1 1.3 10% 30% 2 0.7 30% 10% 3 1.25 10% 20% 4 1.1 10% 20% 5 0.9 40% 20% Total 100% 100%

a. Calculate the betas for portfolios A and B.

b. Compare the risk of each portfolio to the market as well as to each other. Which port- folio is more risky?

P5.30 Referring to Problem 5.29, if the risk-free rate is 2% and the market return is 7%, calcu- late the required return for each portfolio using the CAPM.

i want problem 5.30