You have been managing a $5 million portfolio that has a beta of 1.15 and a required rate of return of 14.775%. The current risk-free rate is 5%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 0.95, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places. %
You have been managing a $5 million portfolio that has a beta of 1.15 and a required rate of return of 14.775%. The current risk-free rate is 5%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 0.95, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places. %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:You have been managing a $5 million portfolio that has a beta of 1.15 and a required
rate of return of 14.775%. The current risk-free rate is 5%. Assume that you receive
another $500,000. If you invest the money in a stock with a beta of 0.95, what will be
the required return on your $5.5 million portfolio? Do not round intermediate
calculations. Round your answer to two decimal places.
%
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