Essay

Your portfolio consists of $100,000 invested in a stock which has a beta=0.8, $150,000 invested in a stock which has a beta = 1.2, and $50,000 invested in a stock which has a beta = 1.8. The risk-free rate is 7 percent. Last year this portfolio had a required rate of return of 15 percent. This year nothing has changed except for the fact that the market risk premium has increased by 3 percent (two percentage points). What is the portfolio's current required rate of return