In: Finance
A portfolio consists of the following four stocks. The dollar investment and beta on each of the stocks are listed below:
Stock | Investment | Beta |
A | $200,000 | 0.5 |
B | $800,000 | 0.8 |
C | $1,500,000 | 1.5 |
D | $2,500,000 | -0.25 |
If the expected return on the market is 11% and the risk-free rate
is 4%, what is the portfolio’s required rate of return?