You are given the following information about Stocks A and B: Rate of Return if State Occurs Stock A Stock B State of Economy Boom Normal Recession Probability of State of Economy 0.25 0.50 0.25 18% 6% -5% 20% 15% 2% Stock A has a beta of 0.325 and Stock B has a beta of 1.000. Assuming that neither of these stocks is over or undervalued: a) What is the market risk premium and risk-free rate? b) What would be the beta of a portfolio consisting of 40% of Stock A and 60% of Stock B? c) What would be the expected return of the portfolio under b)