Assume that you hold a well-diversified portfolio that has an expected return of 12.0% and a beta of 1.20. You are in the process of buying 100 shares of Alpha Corp at $10 a share and adding it to your portfolio. ($1,000)
• Alpha has an expected return of 15.0% and a beta of 2.00. • The total value of your current portfolio is $9,000.
What will the expected return and beta on the portfolio be after the purchase of the Alpha stock?
Please write with details and formulas,