eBookProblem Walk-Through

You have been managing a $5 million portfolio that has a beta of 1.45 and a required rate of return of 10.975%. The current risk-free rate is 3%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.75, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.

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