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Velson Ltd has an expected return of 22% and standard deviation of 40%. BTEC Ltd...

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Finance

Velson Ltd has an expected return of 22% and standard deviation of 40%. BTEC Ltd has an expected return of 24% and standard deviation of 38%. Velson Ltd has a beta of 0.82 and BTEC Ltd has a beta of 1.25. The correlation coefficient between Velson Ltd and BTEC Ltd is +0.75. The standard deviation of the market return is 15%.

Using the Capital Asset Pricing Model formula, calculate: (i) the market portfolios expected rate of return and; (ii) the risk-free rate

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