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Suppose you have Kshs. 10,000 to invest. Suppose also that the market has the following available investments: Security (Stock) Amount invested Expected Return (%) Beta

Suppose you have Kshs. 10,000 to invest. Suppose also that the market has the following available investments: Security (Stock) Amount invested Expected Return (%) Beta () A Kshs. 1,000 8% 0.80 B 2,000 12% 0.95 C 3,000 15% 1.10 D 4,000 18% 1.40 Calculate: i) The Expected Return on the market portfolio ii) The portfolio beta () iii) Suppose the risk-free rate is 8%. Calculate the risk premium

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