BETA COEFFICIENT

Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 9%; rRF = 3.9%; rM = 11.5%.

Round your answer to two decimal places.

b)

CAPM AND PORTFOLIO RETURN

You have been managing a $5 million portfolio that has a beta of 0.75 and a required rate of return of 12%. The current risk-free rate is 3.00%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.30, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.