Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 15MC
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Question
![The P10.00 million mutual fund Pingu manages has a beta of 1.05 and a 9.50% required return. The
risk-free rate is 4.20%. Pingu now receives another P5.00 million, which he invests in stocks with an
average beta of 0.65. What is the required rate of return on the new portfolio?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1e4c28af-7288-40c6-a995-9ebda545999d%2F520a972f-7129-4d1f-b0fb-0e6217631afe%2F71fc0yh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The P10.00 million mutual fund Pingu manages has a beta of 1.05 and a 9.50% required return. The
risk-free rate is 4.20%. Pingu now receives another P5.00 million, which he invests in stocks with an
average beta of 0.65. What is the required rate of return on the new portfolio?
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