Question: Assume that both Apple and Yahoo plot on the SML. Apple has a beta of 2.6 and Yahoo has a beta of 0.9. The expected

Assume that both Apple and Yahoo plot on the SML. Apple has a beta of 2.6 and Yahoo has a beta of 0.9. The expected return on the market portfolio is 10% and the risk-free rate is 3%. If you create a portfolio consisting of Apple and Yahoo and have a portfolio beta equal to 1.5, what would be the expected return on this portfolio?

13.5%

12%

18%

15%

10.5%

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