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You are putting together a portfolio made up of four different stocks. ​ However, you are...

You are putting together a portfolio made up of four different stocks. ​ However, you are considering two possible​ weightings: 

       Portfolio Weightings  
Asset   Beta   First Portfolio   Second Portfolio
A   2.20   12%   38%
B   0.80   12%   38%
C   0.55   38%   12%
D   -1.30   38%   12%

a.  What is the beta on each​ portfolio?

b.  Which portfolio is​ riskier?

c.  If the​ risk-free rate of interest were 3 percent and the market risk premium were 7 percent​, what rate of return would you expect to earn from each of the​ portfolios?

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