Question 1 (7 points) Consider the following information: Probability of State of economy state Boom 0.2 Normal Recession 0.3 Return Stock A 15% 7% 3% Return Stock B 9% 11% 13% 0.5 1. What is the expected return of the portfolio made of 60% investment in Stock A and rest in Stock B? (1.5 marks] II. What is the beta of the portfolio (in parti) if beta of A is 0.90 and beta of B is 1.7? [1 mark] will. If the market risk premium is expected to be 4.25%, what must be the risk-free rate? (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 beta of the portfolio (in part 1)? (1.5 marks) A y Format B I U ... AJ Add a File Record Audio Record Video