Your portfolio consists of $62,276 invested in a stock that has a beta = 1.2,$23,528 invested in a stock that has a beta = 0.9, and $20,786 invested in astock that has a beta = 0.9. The risk-free rate is 3.4%. Last year this portfolio hada required return of 8.2%. This year nothing has changed except that the marketrisk premium has increased by 4.2%. What is the portfolio's current required rateof return?13.22%12.22%13.72%11.72%12.72%

Step 1: Calculate the new market risk premium.Last year's market risk premium + Increase in market…

Answered: Your portfolio consists of $62,276…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 15P

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