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Assume that you manage a $100.00 million mutual fund that has a beta of 1.15 and a 10.50% required return. The risk-free rate is 4.80%.
Assume that you manage a $100.00 million mutual fund that has a beta of 1.15 and a 10.50% required return. The risk-free rate is 4.80%. You now receive another $25.00 million, which you invest in stocks with an average beta of 1.65. What is the required rate of return on the new portfolio?
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