Your portfolio consists of Php100,000 invested in a stock that has a beta = 0.8, Php150,000 invested in a stock that has a beta = 1.2, and Php50,000 invested in a stock that has a beta = 1.8.  The risk-free rate is 7 percent.  Last year this portfolio had a required rate of return of 13 percent.  This year nothing has changed except for the fact that the market risk premium has increased by 2 percent (two percentage points). What is the portfolio’s current required rate of return?   Choices 16.25% 11.45% 16.33% 15.33%

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
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Your portfolio consists of Php100,000 invested in a stock that has a beta = 0.8, Php150,000 invested in a stock that has a beta = 1.2, and Php50,000 invested in a stock that has a beta = 1.8.  The risk-free rate is 7 percent.  Last year this portfolio had a required rate of return of 13 percent.  This year nothing has changed except for the fact that the market risk premium has increased by 2 percent (two percentage points). What is the portfolio’s current required rate of return?

 

Choices

16.25%
11.45%
16.33%
15.33%
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