Question 1 (7 points) Consider the following information: Probability of State of economy state Boom 0.2 Normal 0.5 Recession 0.3 Return Stock 15% 7% 3% Return Stock B 9% 11% 13% 1. What is the expected return of the portfolio made of 60% investment in Stock A and rest in Stock B? [1.5 marks) i. What is the beta of the portfolio (in parti) i beta of Als 0.90 and beta of Bis 1.7? [1 mark) ill. If the market risk premium is expected to be 4%, what must be the risk-free rato? (1.5 marks) iv. What would be the expected return of a portfolio consisting of equal investment in Stock A, Stock B, T-Bills and S&P 500? (1.5 marks) v. What is the bota of the portfolio (in partiv)? [1.5 marks) 8 OC - Format B I U I DE 30 Add a File Record Audio Record Video