Question: Given the following data: Stock Weight Return Standard Deviation beta A 0.60 10% 20% 0.80 B 0.40 20 30 1.20 Calculate: a. The portfolio return.

Given the following data:

Stock Weight Return Standard Deviation beta

A 0.60 10% 20% 0.80

B 0.40 20 30 1.20

Calculate:

a. The portfolio return.

b. The portfolio total risk for rA,B = -1.0, -0.3, 0.0, 0.3, and 1.0.

c. Given that Rf = 8% and Rm = 12%, is the portfolio correctly priced? Explain.

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