The Index Portfolio has invested in three stocks with the following beta and dollar amount of investment. The markets expected return is 13% and the risk free rate is 5%. What is the beta of the portfolio? What is the expected return of the portfolio? (13.23%)
Stock beta Amount Invested
Stock 1 1.2 $150,000
Stock 2 .23 $300,000
Stock 3 2.1 $200,000