Question
A money manager is holding the following portfolio: Stock Amount Invested Beta 1 $5mi 0.7 2 6mi 0.6 3 4mi 1.5 4 5mi 2.0 The
A money manager is holding the following portfolio:
| Stock | Amount Invested | Beta |
| 1 | $5mi | 0.7 |
| 2 | 6mi | 0.6 |
| 3 | 4mi | 1.5 |
| 4 | 5mi | 2.0 |
The risk-free rate is 4 percent and the market's required rate of return is 15 percent. What is the portfolio's required rate of return?
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Financial Accounting Tools for Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
5th Edition
9781118560952, 1118560957, 978-0470239803
