1. What is the beta of a 3-stock portfolio including 25% of stock A with a beta of 0.90, 40% of stock B with a beta of 1.05, and 35% of stock C with a beta of 1.73?
A. 1.0
B. 1.17
C. 1.22
D. 1.25
2. A project's expected return is 15%, which represents a 35% return in a booming economy and a 5% return in a stagnant economy. What is the probability of a booming economy occurring if these are the only two economic states?
a) 18.33%
b) 25.00%
c) 33.33%
d) 50.00%