The answers to the following questions are provided please show the work on how to get the answer, and how to solve and set up the problems:

Grand Inc. has a stock beta of 1.2 and Mega Inc. has a stock beta of 2.60. If you put 40% of your money in Grand and 60% in Mega, what will be the beta of your portfolio? Answer:D

a) 1.09

b) 1.56

c) 1.74

d) 2.04

e) 3.20

Sportique Inc. has a stock beta of 1.7. The 10 year treasury bond currently yields 3.9% and analysts believe the S&P 500 should yield about 12% in the future. What is the companys cost of equity using this information? Answer:E

a) 4.59%

b) 7.42%

c) 11.04%

d) 13.62%

e) 17.67%