Question
You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta A $250,000 1.3 B 200,000 1.7 C 500,000 0.85 D
You are holding a portfolio with the following investments and betas:
| Stock | Dollar investment | Beta |
| A | $250,000 | 1.3 |
| B | 200,000 | 1.7 |
| C | 500,000 | 0.85 |
| D | 50,000 | -0.35 |
| Total investment | 1,000,000 | |
The market's required return is 9% and the risk-free rate is 4%. What is the portfolio's required return? Round your answer to 3 decimal places. Do not round intermediate calculations.
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Financial Institutions, Markets And Money
Authors: David S. Kidwell, David W. Blackwell, David A. Whidbee, Richard W. Sias
12th Edition
1119386489, 1119386483, 978-1-119-3303, 978-1119330363
