Determine the portfolio required rate of return

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Reference no: EM1356610

A manager is holding the following portfolio:

Stock Amount Invested Beta

1 $300,000 0.6

2 $300,000 1.0

3 $500,000 1.4

4 $500,000 1.8

The risk free rate is 6% and the portfolio's required rate of return is 12.5%. The manager would like to sell all of the holdings of stock 1 and use the proceeds to purchase more shares of stock 4. What would be the portfolio's required rate of return following this change?

Reference no: EM1356610

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