Expected return of a portfolio using beta. The beta of four stocks—G, H, I, and J—are 0.44, 0.75, 1.21, and 1.55, respectively and the beta of portfolio 1 is 0.99, the beta of portfolio 2 is...

Expected return of a portfolio using

beta.

The beta of four

stocks—G,

H, I, and

J—are

0.44,

0.75,

1.21,

and

1.55,

respectively and the beta of portfolio 1 is

0.99,

the beta of portfolio 2 is

0.83,

and the beta of portfolio 3 is

1.14.

What are the expected returns of each of the four individual assets and the three portfolios if the current SML is plotted with an intercept of

3.5%

(risk-free rate) and a market premium of

10.0%

(slope of the line)?

What is the expected return of stock G?