Question 2 You are the manager of a portfolio of stocks as shown below. Stock B C Invested amount $2m $3m $5m Beta 1.6 0.2 ? The expected return on the market is 10%. The risk free rate is 4%. (a) Calculate the beta of stock C if the portfolio has a beta that is similar to the market. (6) Without calculating, infer the expected return of the portfolio. (c) Propose one (1) possible method to rebalance the portfolio if you expect the stock markets to fall in the next 6 months. Discuss your rationale