You invest $5,000 in Stock X, $2,000 in Stock Y, and $3,000 in Stock Z.

a) If the expected returns on Stocks X, Y, and Z are 15%, 10%, and 12%, respectively, what is the expected return on the portfolio?

b) If the betas for Stocks X, Y, and Z are 0.75, 1.20, and 1.60, respectively, what is the portfolio beta? If therisk free rate of return is 5 percent and the return on the market portfolio is 11 percent, what is the expected return on the portfolio according to the Capital Asset Pricing Model (CAPM)?