Problem

Suppose you have invested $30,000 in the following four stocks

Security		Amount Invested		Beta
Stock A		$  5,000			0.75
Stock B		  10,000			1.10
Stock C		    8,000			1.36
Stock D		    7,000			1.88

a.  The risk-free rate is 4 percent and the expected return on the
market portfolio is 15 percent.  Based on the CAPM what is expected
return on the above portfolio?

b.  The beta of a portfolio is the weighted average of the betas of its
individual securities.

Question

What financial concept or principle is the problem asking you to solve?

What are some business decisions that a manager would be able to make
after solving the problem?

Is there any additional information missing from the problem that
would enhance the decision-making process?

Without showing mathematical calculations, explain in writinghow you
would solve the problem?