What is the portfolio expected return and the portfolio beta if you invest 30% in A, 30% in B, and 40% in the risk-free asset? 

Which of a and b has the least total risk?

The portfolio expected return is 4.50%. This can be calculated by taking the weighted average of each asset’s expected return. For example, A has an expected return of 5%, B has an expected return of 3%, and the risk-free asset has an expected return 0%. Therefore, the portfolio’s expected return is (0.3 x 5%) + (0.3 x 3%) + (0.4 x 0%) = 4.50%.

The portfolio beta is 1.15. This can be calculated by taking the weighted average of each asset’s beta value: A has a beta value of 1, B has a beta value of 1.5, and the risk-free asset has a beta value of 0: therefore, (0.3 x 1) + (0.3 x 1.5) + (0