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You've assembled the following portfolio: Stock Beta Portfolio weight 1 1.6 0.4 2 1.1 0.4 3 0.9 0.2 The expected market return is 5% and

You've assembled the following portfolio:

Stock	Beta	Portfolio weight
1	1.6	0.4
2	1.1	0.4
3	0.9	0.2

The expected market return is 5% and the risk-free rate is 2%. Assume that the CAPM holds.

1. What is the beta of the portfolio?

2. What is the expected return of your portfolio?

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