Q2. Consider a stock portfolio consisting of shares of 4 firms. Their values today, AUG 10, 2021 in the portfolio are $1,500,000; $1,250,000; $1,250,000 and $1,000,000. Their respective betas with the SP500 index are: 1.4; 1.7; 1.3 and 0.7. The respective returns on these stocks over last year were: 10%; 4%; -8% and 3%.

2.1 Calculate the portfolio's beta.

2.2 Calculate the portfolio's annual rate of return.