PLEASE PAY PARTICULAR ATTENTION TO PART C AND D! USE FULL SOLUTIONS THANK YOU :)

PROBLEM 4: Suppose you invest $400,000 in T-bills and $600,000 in the market portfolio. [6 points] (a) What is the return on your portfolio if T-bills yield 6% and the expected return on the market is 14%? [2 pts] (b) Under the above assumptions (e.g., statement in (a) and problem description), what is the current expected market risk premium? [1 pt] (c) What is the beta of your portfolio? [2 pts] (d) Using the result you obtain in (a) or otherwise, what does the return on your portfolio imply for the expected return on individual stocks with betas of 0.6? [1 pt]