Problem:
An investor currently has all of his wealth in Treasury bills. He is considering investing one-third of his funds in General Electric, whose beta is 1.30, with the remainder left in Treasury bills. The expected risk-free rate (Treasury bills) is 6 percent and the market risk premium is 8.8 percent.
Required:
Question: Determine the beta and the expected return on the proposed portfolio.
Note: Please show guided help with steps and answer.