Quantitative Problem: You are holding a portfolio with the following investments and betas:
Stock | Dollar investment | Beta | ||
A | $200,000 | 1.15 | ||
B | 100,000 | 1.50 | ||
C | 300,000 | 0.80 | ||
D | 400,000 | -0.20 | ||
Total investment | $1,000,000 |
The market's required return is 10% and the risk-free rate is 4%. What is the portfolio's required return? Do not round intermediate calculations. Round your answer to three decimal places.
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