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Use the following information for problems 3 through 10: The risk-free rate of return is 4%,...

Use the following information for problems 3 through 10: The risk-free rate of return is 4%, the required rate of return of the market portfolio is 10%. You invest $10,000 in stock A, $15,000 in stock B, $50,000 in stock C, and $50,000 in stock D. The average returns and standard deviations of the individual stocks are as follows:

Ret

Standard Deviation

Beta

Stock A

0.25

0.31

2.0

Stock B

0.16

0.36

1.0

Stock C

0.04

0.17

0.8

Stock D

0.02

0.08

0.3

1) What is the required rate of return?

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