Suppose that the S&P 500, with a beta of 1.0, has an expected return of 12% and T-bills provide a risk-free return of 4%.

a, What would be the expected return and beta of portfolios constructed from these two assets with weights in the S&P 500 of (i) 0; (ii) 0.25; (iii) 0.50; (iv) 0.75, (v) 1.0? ( Leave no cell blank- be certain to enter "0" whenever required. Do not round intermediate calculations. Enter the value of expected return as a percentage rounded to 2 decimal places and value of Beta rounded to 2 decimal places.)

b. How does expected returns vary with beat? (Do not round intermediate calculations.)