Question: Question 2 Question 2 (8 marks) Required: i. You have a portfolio consisting of two stocks: A and B. There are 520 shares of Stock

Question 2 Question 2 Question 2 (8 marks) Required: i. You have a portfolio

Question 2 (8 marks) Required: i. You have a portfolio consisting of two stocks: A and B. There are 520 shares of Stock A and 300 shares of B. Stock A is selling for $25 per share and while Stock B is trading at a price of $48 per share. What is the expected return on this portfolio? ii. The common stock of PDS has a beta of 98 and an expected retum of 12.34%. The risk-free rate of return is 4.1% and the market rate of retum is 11.65%. Is PDS stock underpriced or overpriced according to the Capital Asset Pricing Model? ill. Your portfolio has a beta of 1.24. The portfolio consists of 10% in US Treasury bills. 555 in stock A, and the rest in stock B. Stock A has a risk-level equivalent to that of the overall market. What is the beta of stock B

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