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Please give me a~f answers and explanation Thank you so much QUESTION TWO An investor has constructed a portfolio where 60% of the money are

Please give me a~f answers and explanation Thank you so much

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QUESTION TWO An investor has constructed a portfolio where 60% of the money are invested in stock 1 and 40% in stock 2. Given the data below, answer the following: a) Calculate the betas of stocks 1 and 2. (10 marks) b) Calculate the beta of the portfolio. (5 marks) c) Calculate the expected return of the portfolio using the CAPM. (10 marks) (1) According to the CAPM, would you classify stocks 1 and 2 as overvalued or undervalued. (10 marks) e) For the risk-free rate, calculate its correlation with the market and its standard deviation. (5 marks) f) Briey discuss the main benets and drawbacks of the CAPM, compared to other asset- pricing models (in maximum 150 words). (10 marks) Expected return Correlation with the Standard deviation market ortfolio Stock] . 11.25% | 0.90 | l?% Stock 2 I 1% I 0.?0 I 12% Market portfolio 10% | 1 | 13% Risk free rate ! 3% I I [TOTAL: 50 MARKS]

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