You have been managing a $5 million portfolio that has a beta of 0.90 and a required rate of return of 15%. The current risk-free rate is 7.25%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.00, what will be the required return on your $5.5 million portfolio?

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Heres how to calculate the required return on the entire portfolio after the new investment 1 Calcul... View the full answer