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Suppose you form a portfolio consisting of $ 2 6 , 0 0 0 invested in a mutual fund with beta of 1 . 8

Suppose you form a portfolio consisting of $26,000 invested in a mutual fund with beta of 1.8, $26,000 invested in Treasury securities (assume risk-free), and $18,000 invested in an index fund tracking the market. Expected market risk premium is 6.5%. Risk-free rate is 1.1%. What is the expected return of this portfolio according to the CAPM? Answer in percent, rounded to one decimal place.

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