You have invested the following amounts in Stock A, B, C and D.

Security	$ Invested		Beta		Std. Dev.
A	$	5,000		0.79	10.0%
B	$	3,000		1.36	15.0%
C	$	5,000		1.01	12.0%
D	$	7,000		1.89	18.0%

A. What is the beta of your portfolio? Show details of your calculations below.

B. Suppose the market risk premium is 8% and the risk-free rate is 2%. What is the expected return of each stock? Show details of your calculations below.

C. Calculate the risk-reward ratio for each stock. Assume that Stock A is correctly priced. Are each of Stock B, C, and D overpriced, underpriced or correctly priced? Show details of your calculations below.

Stock A:

Stock B:

Stock C:

Stock D: