Each question below is independent with each other. a) Given the following information, what is the expected return on a portfolio which is invested 60 percent in stock A and 40 percent in stock B ? ( 7 marks) (b) The risk-free rate of return is 4.2 percent and the market rate of retum is 8.5 percent. What is the expected return for a stock with a beta of 1.4 ? ( 3 marks) (c) You own a portfolio which is 30 percent invested in U.S. Treasury bills, 20 percent invested in Stock A which has a beta of 1.21 and 20 percent invested in stock B which has a beta of 89 . The balanee is invested in stock C, which is equally as risky as the market. The risk-free rate of retum is 4.5 percent and the expected return on the market is 12 percent. What is the beta of the portfolio? (3 marks) (d) A portfolio is expected to return 10 percent in a normal economy, lose 8 percent in a boom economy, and return 16 percent in a recessionary economy. The probability of a boom is 30 pereent while the probability of a recession is 20 pereent. What is the variance of the portfolio? (7 marks)