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Tom is managing a $ 1 0 million portfolio that has a beta of 1 . 2 5 and a required rate of return of

Tom is managing a $10 million portfolio that has a beta of 1.25 and a required rate of return of 12.6%. The current risk-free rate is 4.7%. Assume that Tom receives another $2 million. If Tom invests the money in a stock with a beta of 0.85, what will be the required return on Toms 12 million portfolio?

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