Portfolio Beta and Capital Asset Pricing Model(CAPM).
Asset Beta First Portfolio Second Portfolio
A 2.40 20% 30%
B 0.90 20% 30%
C 0.60 30% 20%
D -1.60 30% 20%
a.)What is the beta for each portfolio?( I have 0.36 for First and 0.79 for Second)
b.) If the risk free rate on interest were 4.5% and the market risk premium were 7.5%, what rate of return would you expect to earn from each portfolio?