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Stock A's required return is 12%. Stock B's required return is 8%. TA has both stocks in his portfolio. If the risk-free rate is 3%,
Stock A's required return is 12%. Stock B's required return is 8%. TA has both stocks in his portfolio. If the risk-free rate is 3%, and the market risk premium is 5%, what is the required rate of return on his portfolio? The portfolio's beta is 0.9.
A. 5.2%
B. 5.6%
C. 6.4%
D.7.5%
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