Compute of portfolios required rate of return

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Reference no: EM1316566

Compute of portfolios required rate of return with given data

A money manager is holding the following portfolio:

Stock Amount Interested 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 percent and the portfolio's required rate of return is 12.5 percent. The manager would like to sell all of her 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: EM1316566

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