Part II Question 1: You invest in a portfolio of 5 stocks with an equal investment in each one. The betas of the 5 stocks are as follows:.8,-1.3,95, 1.2 and 1.4. The risk-free return is 3% and the market return is 7%. 1. Compute the beta of the portfolio. 2. Compute the required return of the portfolio. Question 2: You are given the following probability distribution for a stock: Probability Outcome -6% .5 18% 1. A) Compute the expected return. 2. B) Compute the standard deviation. 3. C) Compute the coefficient of variation. Part III Question 1: What is the rationale for the positive correlation between risk and expected return? Question 2: Why is it possible to eliminate unsystematic risk in a well-diversified portfolio? Likewise, why is it not possible to eliminate systematic risk