What is the lowest total risk of both a or b?

The expected portfolio return is 4.50%. This can be calculated by taking the weighted average of each asset’s expected return. As an example, let’s say A is expecting a return at 5% and B expects to return at 3%. Meanwhile, the expected return on risk-free assets will return zero. Therefore, the portfolio’s expected return is (0.3 x 5%) + (0.3 x 3%) + (0.4 x 0%) = 4.50%.

Portfolio beta = 1.15 This can be calculated by taking the weighted average of each asset’s beta value: A has a beta value of 1, B has a beta value of 1.5, and the risk-free asset has a beta value of 0: therefore, (0.3 x 1) + (0.3 x 1.5) + (0