1. An individual has $35,000 invested in a stock with a beta of 0.7 and another $40,000 invested in a stock with a beta of 1.5. If these are the only two investments in her portfolio, what is her portfolio's beta?
2. Assume that the risk-free rate is 5% and the expected return on the market is 13%. What is the required rate of return on a stock with a beta of 0.8?
3. Assume that the risk-free rate is 5% and the market risk premium is 6%. What is the expected return for the overall stock market? What is the required rate of return on a stock with a beta of 1.4?