Question 1 (a) Suppose COCA COLA Inc. has a beta of 1.05, whereas TIMBERLAND Inc. has a beta of 0.37. If the risk-free interest rate is 2 percent and the expected return of the market portfolio is 5 percent, calculate the expected return of a portfolio that consists of 60 percent CocaCola stock and 40 percent Timberland stock, according to the Capital Asset Pricing Model (CAPM)? (b) With reference to portfolio theory, discuss in the role of diversification in making investment decisions