Refer to Questions 1 and 2. Richard has just received an unexpected bonus at work worth $22,000 and, given the J. Corp.'s reputation for excellent investment decision making, he will invest all of the bonus in J Corp. stock. Given the rates of return for stocks A, B, C, and D presented in Question 1 and the rates of return for J Corp. stock and the market presented in Question 2, as well as the cash amounts he is investing in stocks A, B, C, and D as you determined in Question 1, a) What is the beta of Richard's portfolio? (3 Marks) Enter Answer (round to two decimal points) b) Richard's portfolio is (2 Mark) Aggressive } Defensive Check only one box Neither Richard must decide how to allocate the capital in his portfolio. Richard has $88,000 available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given below. Richard plans to invest 25% of his funds in each stock. Year Stock A (%) Stock B (%) Stock C (%) Stock D (%) 1 -9.940 -17.110 2.650 -16.340 2 9.896 15.950 -0.656 16.720 3 15.236 24.850 -1.546 25.620 4 18.836 30.850 -2.146 31.620 5 -16.660 -28.310 3.770 -27.540 6 19.472 31.910 -2.252 32.680 7 15.212 24.810 -1.542 25.580 8 16.052 26.210 -1.682 26.980 9 14.300 23.290 -1.390 24.060 10 11.096 17.950 -0.856 18.720 11 -5.788 -10.190 1.958 -9.420 12 -7.060 -12.310 2.170 -11.540 Anna is a Vice President at the J Corporation. The company is considering investing in a new factory and Anna must decide whether it is a feasible project. In order to assess the viability of the project, Anna must first calculate the rate of return that equity holders expect from the company stock. The annual returns for J Corp. and for a market index are given below. Currently, the risk-free rate of return is 1.6% and the market risk-premium is 3.7% a) What is the beta of J Corp.'s stock? (1 Mark)(Round your answer to two decimal places) b) Using the CAPM model, what is the expected rate of return on J Corp. stock for the coming year? (2 Marks)(Round your answer to one one-hundreth of a percent) Year J Corp. Return (%) Market Return (%) 1 -6.36 -8.60 2 6.04 7.93 3 9.38 12.38 4 11.63 15.38 5 -10.56 -14.20 6 12.02 15.91 7 9.36 12.36 8 9.89 13.06 9 8.79 11.60 10 6.79 8.93 11 -3.77 -5.14 12 -4.56 -6.20