UPS, a delivery services company, has a beta of

1.4,

and Wal-Mart has a beta of

0.8

The risk-free rate of interest is

6%

and the market risk premium is

9%.

What is the expected return on a portfolio with 40% of its money in UPS and the balance in Wal-Mart?

A.

13.82%

B.

14.59%

C.

16.9%

D.

15.36%