You have a portiolio that consists of

35%

Microsoft stock,

35%

Amaron stock, and

30%

GE stock Merosot has a beta of 1, Amazon has a beta of 3.0, and GB has a beta of O.5. Treggury bills (the risk free asset) currently ofier a return of

4%

, and the expected retum on the mark it is

11.5%

.\ a. Use the CAPM to estimate the expected retum of each stock\ b. What is the beta of your portiolio?\ c. Compute the expected return of your portiolio using the CAPM equation and the portifitio beta from partb.\ a. Compute the expected retum of your portiflio by taking the weighted average of the individual stocks' expected returns (calculated in part a.).

10. You have a portfolio that consists of 35% Mierosof stock, 35% A maron stock, and 30% GE stock, Mierosot has a beta of 1, Amazon has a beta of 3.0, and GB has a beta of O.5. Trexgry bitls (the risk fiee asset) curnently ofier a return of 4%, and the expected retum on the mark its 11.5%. a. Use the CAPM to estimate the expected retum of each stock. b. What is the beta of your portfolio? c. Compute the expected return of your portfolio using the CAPM equation and the port olio beta from partb. a. Compute the expected return of your portiolio by talaing the weighted average of the individual stocks' expected returns (calculated in part a.)