You are an investor in common stock, and you currently hold a well-diversified portfolio which has a required return of 12%, a beta of 1.2, and a total value of $9,000.

You plan to increase your portfolio by buying 100 shares of AT&E at $10 a share. AT&E has a beta of 1.8.

The current T-bill rate is 3%.

What will be the required return of your portfolio after you purchase the new stock?

Select one:

a.16.17%

b.12.35%

c.12.54%

d.12.45%

e.10.67%