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UPS, a delivery services company, has a beta of 1.1, and Wal-Mart has a beta of 1.0. The risk-free rate of interest is 4% and

UPS, a delivery services company, has a beta of 1.1, and Wal-Mart has a beta of 1.0. The risk-free rate of interest is 4% and the market risk premium is 6%. What is the expected return on a portfolio with 50% of its money in UPS and the rest in Wal-Mart?

A.

10.3%
B.

9.9%
C.

11.1%
D.

12.4%

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