Using the information in question 4, what is the required rate of return (equilibrium expected rate of return) of the portfolio?

17.89%

15.57%

13.58%

20.01%

Assume that the risk-free rate of return is 3% and the market risk premium is 6%. A portfolio contains the following three stocks: Stock Average returns Standard deviation of returns CAPM beta Weight in portfolio Stock A 0.05 0.15 1.90 0.35 Stock B 0.09 0.37 2.80 0.50 Stock C 0.02 0.42 0.20 0.15