Tom forms a portfolio by investing $$50,000$ in Stock X which has beta of $1\mathrm{.}8,$ and $$150,000$ in Stock Y which has a beta of $0\mathrm{.}5.$ The return on the market is equal to $11\mathrm{.}4\%$ amd the risk$-$free rate is $3\%.$ What is the required rate of return on Tom's portfolio?

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To calculate the required rate of return on Toms portfolio we can use the Capital Asset P... View the full answer