Question # 02 Gul Ahmed Textiles has a beta of 1.45, while Al-Karam Textiles has a beta of 0.85. The required return on an index fund that holds the entire stock market is 12.0%. The risk-free rate of interest is 5%. By how much does Gul Ahmeds required return exceed Al-Karams required return? Question # 03 Mr. Hatim hold a diversified portfolio consisting of Pakistan State Oil, OGDC, Mobilink, Fauji Fertilizer Company, Zeal Pak Cement and KAPCO. He made an investment of Rs. 10,000 in each common stock. Beta of the portfolio is 1.17. After analyzing the market trends he decided to sell Zeal Pak Cement with a beta of 1.0 for Rs.10,000 and use the proceeds to buy Pakistan Tobacco Company with a beta of 1.65. On the basis of provided information what would be the new portfolio beta that Mr. Hatim holds?