Question: The expected returns for securities A, B and C are listed below: Expected returns: Security A - 12% Security B - 18% Security C -

The expected returns for securities A, B and C are listed below:

Expected returns:

Security A - 12%

Security B - 18%

Security C - 9%

Assuming the risk-free rate of 3% and market premium of 6%:

1. What are the betas for the three securities?

2. For a portfolio consisting of 20% of security A, 45% of security B, and 35%, determine the portfolios expected return and beta.

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