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The $10.00 million mutual fund LA manages has a beta of 1.05 and a 9.50% required return. The risk-free rate is 4.20%. Henry now receives
The $10.00 million mutual fund LA manages has a beta of 1.05 and a 9.50% required return. The risk-free rate is 4.20%. Henry now receives another $5.00 million, which he invests in stocks with an average beta of 0.65. What is the required rate of return on the new portfolio? (Hint: You must first find the market risk premium, then find the new portfolio beta.) Select one: O a. 9.27% Ob. 9.51% O c. 9.05% O d. 9.74% O e. 8.83%
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