Suppose that the S&P 500, with a beta of 1.0, has an expected return of 11% 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 cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places.)

		Expected Return	Beta
(i)	0	?%	?
(ii)	0.25	?%	?
(iii)	0.50	?%	?
(iv)	0.75	?%	?
(v)	1	?%	?

b. How does expected return vary with beta? (Do not round intermediate calculations.)

The expected return (increases/decreases) by __% for a one unit increase in beta.