pt1) You own a stock portfolio invested 35 percent in Stock Q, 30 percent in Stock R, 20 percent in Stock S, and 15 percent in Stock T. The betas for these four stocks are .92, 1.25, 1.09, and 1.27, respectively. What is the portfolio beta?

pt2) A stock has a beta of 1.24, the expected return on the market is 10 percent, and the risk-free rate is 4.5 percent. What must the expected return on this stock be?

pt3) What is risk-return trade off? As a potential investor, why is it important to understand risk- return trade off?