Answer:
Let X be the amount invested in stock A
Let 1-X be the amount invested in stock B
Expected rate = (Required rate of X* X) + (Required ratebof Y * (1-X))
0.146 = (0.128 * X) + (0.078 * (1-X))
0.146 = 0.128X + 0.078 - 0.078X
0.146 - 0.078 = 0.128X - 0.078X
X = 0.068/0.05
X = 1.36
Amount to be invested in Stick X = $130,000 * 1.36
= $176,000
Amount to be invested in Stock Y = (1-X) * Available amount
= (1-1.36) * $130,000
= $46,800
Therefore, the amount to be invested in Stick Y = -$46,800
Calculation of the portfolio beta
bp = w1b1 + w2b2 + ........ + wnbn
bp = (1.36*1.3) + ((-0.36) * 1.05)
bp = 1.768 - 0.378
bp = 1.29
Therefore, the portfolio beta is 1.39
