3. Suppose that the S&P 500, with a beta of 1.0, has an expected return of 16% and T-bills provide a risk-free return of 3%. 

a. What would be the expected return and beta of portfolios constructed from these two assets with weighs in the S&P 500 of (I) 0; (II) 0.25; (III) 0.50; (IV) 0.75; (V) 1.0? (Leave no cells blank and be certain to enter “0” wherever required. Do not round intermediate calculations. Enter the value of Expected return as a percentage rounded to 2 decimal placesand value of Beta rounded to 2 decimal places.)

b. How does expected return vary with beta. (Do not round intermediate calculations)