Question: Total=30 Marks] QUESTION TWO The table below gives the amount invested and betas for three stocks. Stock Amount Invested Beta GM K10,000 1.2 IBM K10,000

Total=30 Marks] QUESTION TWO The table below gives the amount invested

Total=30 Marks] QUESTION TWO The table below gives the amount invested and betas for three stocks. Stock Amount Invested Beta GM K10,000 1.2 IBM K10,000 1.0 WMT K20,000 0.7 Page 2 of 4 REQUIRED: A. Using the CAPM, if the expected return for the market is 6% and the risk-free rate is 1.5%, what is the expected return for each stock? [10 Marks] B. What is the beta for this portfolio based on the invested amounts? [10 Marks] C. Using the CAPM, what is the expected return for this portfolio? (10 Marks) [Total=30 Marks]

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