You are in the process of evaluating five stocks and have been provided with the following Beta's and expected returns: Stock Beta Expected Return B C 0.92 1.64 0.64 1.15 1.55 9.50% 16.00% 8.02% 12.00% 12.50% D E Required: (Please ensure you show all workings). A. Use the capital asset pricing model (CAPM) to calculate the expected returns for the stocks above if the risk-free rate of return is 4.2 percent and the market rate of return is 10.5 percent. B. Based on results in part A, which stocks are undervalued? C. Ignoring results from part A, if you were to invest $300 in stock A, $500 in stock B and $700 in stock C to form a portfolio, what is the beta of your portfolio? D. What does the portfolio beta measure? E. Based on the portfolio beta calculated in C above, is your portfolio riskier or less risky than the market overall? F. If I wanted to reduce the beta of the portfolio further what could I do? G. Would there potentially be a cost in reducing the portfolio beta, and what would that cost be