The risk-free rate is 5.4 percent and the market risk premium is 5 percent. Assume that required returns are based on the CAPM. Your $1 million portfolio consists of $ 218,000 invested in a stock that has a beta of 0.5 and the remainder invested in a stock that has a beta of 1.4. What is the required return on this portfolio?
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Home » Business » The risk-free rate is 5.4 percent and the market risk premium is 5 percent. Assume that required returns are based on the CAPM. Your $1 million portfolio consists of $ 218,000 invested in a stock that has a beta of 0.