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(Portfolio beta and security market line) You own a portfolio consisting of the following stocks:...

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(Portfolio beta and security market line) You own a portfolio consisting of the following stocks: The risk-free rate is 8 percent. Also, the expected retum on the market portfolio is 14 percent a. Calculate the expected return of your portfolio. (Hint: The expected retum of a portfolio equals the weighted average of the Individual stocks expected retum. where the weights are the percentage invested in each stock.) b. Calculate the portfolio beta C. Given the preceding Information, plot the security market line on paper. Plot the stocks from your portfolio on your graph d. From your plot in parte, which stocks appear to be your winners and which ones appear to be losers? o. Why should you consider your conclusions in part d to be less than certain? Data Table Stock Percentage of Portfolio Beta 25% 0.95 2 10% 0.90 3 12% 125 4 15% 0.70 38% 1.65 (click on the icon in order to copy its content into a spreadshot) Expected Return 19% 13% 21% 10% 26% Print Done

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