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Hedge Funds 'R Us has a $50 million portfolio consisting of two stocks: Highly Leveraged Retailer (HLR) with a beta of 4.95 and Steady Eddie

Hedge Funds 'R Us has a $50 million portfolio consisting of two stocks: Highly Leveraged Retailer (HLR) with a beta of 4.95 and Steady Eddie Utility (SEU) with a beta of 0.85. The risk-free rate is 3.75%, and the market risk premium is 6.50%. If Hedge Funds 'R Us invests $35 million in HLR and the balance of its funds in SEU, what it the Hedge Fund's required rate of return according to CAPM?

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