Suppose you manage a $4 million fund that consists of four stocks with the following investments. What is the Beta of the portfolio? Stock Investment Beta % Invested in Each Stock Weighted Beta A $400,000 1.50 B $600,000 -0.50 $1,000,000 1.25 D 2,000,000 0.75 Portfolio Beta If the Expected Return of the Market, E(Rm) = 14% and the Risk Free rate, Rf = 6%, what if the Expected Return of the Portfolio, E(Rp)? Use the Capital Asset Pricing Model: E(Rp) =Rf + Bp(E(Rm) - RA