Question
You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta A $300,000 1.35 B 200,000 1.7 C 300,000 0.85 D
You are holding a portfolio with the following investments and betas:
| Stock | Dollar investment | Beta |
| A | $300,000 | 1.35 |
| B | 200,000 | 1.7 |
| C | 300,000 | 0.85 |
| D | 200,000 | -0.35 |
| Total investment | $1,000,000 | |
The market's required return is 9% and the risk-free rate is 4%. What is the portfolio's required return? Round your answer to 3 decimal places. Do not round intermediate calculations.
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Valuation, Measuring And Managing The Value Of Companies
Authors: Tim Koller, Marc Goedhart, David Wessels
7th Edition
1119611865, 9781119611868
