You are a small money manager managing $9,000,000 in assets. Your investment portfolio consists of 10% T-bills (with an estimated beta = 0), 15% bonds (with an estimated beta = 0.70), 35% mid-cap stocks (with an estimated beta = 1.00), and 40% growth stocks (with an estimated beta = 1.40).

The risk-free rate, r_RF, is 3.5%. The market risk premium, (r_M - r_RF), is 5.0%. What is the required rate of return on your investment portfolio?

If you switch $450,000 out of T-bills and invest $300,000 of it in growth stocks and $150,000 of it in mid-cap stocks, what would be the required rate of return on your portfolio?