Suppose that you compute betas for five securities: A = 0.3, B = 0.4, C = 1.2, D = 1.3, E = 0.9. You also observe that return on the market portfolio is 8%, while risk-free rate is 2%.

(a) Suppose that you form a portfolio where each stock has the same weight of 15%, market portfolio has weight of 10%, and remaining is invested in risk-free security. Compute expected return, risk premium and beta of this portfolio.