Quantitative Problem: You are holding a portfolio with the following investments and betas:

Stock	Dollar investment	Beta
A	$200,000	1.2
B	150,000	1.5
C	500,000	0.85
D	150,000	-0.25
Total investment	1,000,000

The market's required return is 10% and the risk-free rate is 3%. What is the portfolio's required return? Round your answer to 3 decimal places. Do not round intermediate calculations. %

CAPM and required return

Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.2% rate of inflation in the future. The real risk-free rate is 3%, and the market risk premium is 6%. Mudd has a beta of 1.2, and its realized rate of return has averaged 14.5% over the past 5 years. Round your answer to two decimal places.

%

Portfolio required return

Suppose you are the money manager of a $4.68 million investment fund. The fund consists of four stocks with the following investments and betas:

Stock	Investment	Beta
A	$ 200,000	1.50
B	680,000	- 0.50
C	1,300,000	1.25
D	2,500,000	0.75

If the market's required rate of return is 13% and the risk-free rate is 5%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. %