You have a fairly strong investment portfolio (see amounts and Beta values below). However, a new opportunity has presented itself and you are unsure if it is worth the investment.

a) Given that the projected market return is 9% and a risk free rate of 3.25%, what return would you require from this new investment for it to be attractive.

b) Once you've calculated the result, explain the answer.

Asset /Investment Amount/ Beta

A $2, 050 1.81

B $3, 325 0.83

C $4,725 1.14

D $6, 285 0.31

E $2,062 0.04

F $4,650 0.18

Answer rating: 100% (QA)

a Required Return for the New Investment We can calculate the required return using the Capital Asse... View the full answer