You are given the following information about Stocks A and B: State of Economy State of Economy Probability of Rate of Return if State Oecurs Stock A Stock B 22% 17% 16% Boom Normal Recession 0.30 0.50 0.20 26 Stock A has a beta of 1.5 and Stock B has a beta of 1.2. .. What is the beta of a portfolio consisting of 60% of Stock A and 40% of Stock B? b. What is the expected return of a portfolio consisting of 60% of Stock A and 40% of Stock B? Which stock has a greater return variance