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Problem Walk$-$Through

You have been managing a $$5$ million portfolio that has a beta of $1\mathrm{.}25$ and a required rate of return of $10\mathrm{.}125\%.$ The current risk$-$free rate is $2\%.$ Assume that you receive another $$500,000.$ If you invest the money in a stock with a beta of $1\mathrm{.}05,$ what will be the required return on your $$5\mathrm{.}5$ million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.

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