Question
You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta A $250,000 1.3 B 200,000 1.7 C 500,000 0.85 D
You are holding a portfolio with the following investments and betas:
| Stock | Dollar investment | Beta |
| A | $250,000 | 1.3 |
| B | 200,000 | 1.7 |
| C | 500,000 | 0.85 |
| D | 50,000 | -0.35 |
| Total investment | 1,000,000 | |
The market's required return is 11% and the risk-free rate is 5%. What is the portfolio's required return? Round your answer to 3 decimal places. Do not round intermediate calculations. %
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Investment Science
Authors: David G. Luenberger
1st International Edition
0195391063, 9780195391060
