Assume that the risk-free rate is 2.99 percent and that the market portfolio has a 27 percent expected return with a 35 percent volatility (standard deviation). Word Inc. has a volatility of 47 percent and a correlation with the market of .82, whilst Excel Inc. has a volatility of 45 percent and a correlation with the market of 0. Assume that the CAPM assumptions are correct.

Obtain Excels required return. (