Use the following information for problems 3 through 10: The risk-free rate of return is 4%, the required rate of return of the market portfolio is 10%. You invest $10,000 in stock A, $15,000 in stock B, $50,000 in stock C, and $50,000 in stock D. The average returns and standard deviations of the individual stocks are as follows:

	Ret	Standard Deviation	Beta
Stock A	0.25	0.31	2.0
Stock B	0.16	0.36	1.0
Stock C	0.04	0.17	0.8
Stock D	0.02	0.08	0.3

1) Assume that you invest another $150,000 in a fifth stock. Stock E has an average rate of return of 0.18, a standard deviation of returns of 0.22, and a beta of 1.8. What is the new portfolios beta?

2)Assume that you invest another $150,000 in a fifth stock. Stock E has an average rate of return of 0.18, a standard deviation of returns of 0.22, and a beta of 1.8. What is the equilibrium expected rate of return of the new portfolio?

3)Assume that you invest another $150,000 in a fifth stock. Stock E has an average rate of return of 0.18, a standard deviation of returns of 0.22, and a beta of 1.8. What is the required rate of return of Stock E?