06: Blueprint Problems - Risk and Return

Quantitative Problem: You are holding a portfolio with the following investments and betas:

Stock	Dollar investment			Beta
A		$250,000		1.30
B		150,000		1.70
C		400,000		0.85
D		200,000		-0.20
Total investment		$1,000,000

The market's required return is 11% and the risk-free rate is 3%. What is the portfolio's required return? Do not round intermediate calculations. Round your answer to three decimal places.

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