You are going to invest $20,000 in a stock that has a beta of 1.0 and $80,000 in a stock with a beta of 1.5. What is the beta of the portfolio?

A. 1.4

B .8

C. 1.5

D .2

Assume the following:

• interest rate on Treasury securities is 3% (rRF= 3.0%).
• the return on the market is 10% (rM= 10%).
• the beta of stock I is 1.5.(bi= 1.5).

What is the required return on stock I?

A. 13.5

B. 19.5

C. 15.0

D. 8.0