1. You invest $25,000 in T-bills and $50,000 in the market portfolio. If the risk free rate equals 2 percent and the expected market risk premium is 6 percent, what is the expected return on your portfolio?
2. The risk-free rate equals 4 percent, and the expected return on the market is 10 percent. If a stock's expected return is 13 percent, what is the stock's beta?