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You've assembled the following portfolio: Stock Beta Portfolio weight 1 1.3 0.4 2 1.1 0.2 3 0.5 0.4 The expected market return is 9% and

You've assembled the following portfolio:

Stock Beta Portfolio weight
1 1.3 0.4
2 1.1 0.2
3 0.5 0.4

The expected market return is 9% and the risk-free rate is 2%. Assume that the CAPM holds.

a. What is the beta of the portfolio?

b. What is the expected return of your portfolio?

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