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Tom forms a portfolio by investing $ 5 0 , 0 0 0 in Stock X which has beta of 1 . 8 , and

Tom forms a portfolio by investing $

50, 000

in Stock X which has beta of

1.8,

and $

150, 000

in Stock Y which has a beta of

0.5 .

The return on the market is equal to

11.4 %

amd the risk

-

free rate is

3 % .

What is the required rate of return on Tom's portfolio?

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