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Problem:

An investor is forming a portfolio by investing 150,000 in a stock A which has a beta of 1.50 and $250,000 in stock B which has a beta 0.80. The return on the market is equal to 5 percent and Treasury bonds have a yield of 3 percent.

Required:

Question: What is the required rate of return on the investor's portfolio?

Note: Please explain comprehensively and give step by step solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170874

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