You manage a 20m mutual fund that has a beta of 140 and a


You manage a $20M mutual fund that has a beta of 1.40 and a 10.30% required return. The risk-free rate is 3.30%. You now receive an additional $5M, which you invest in stocks with an average beta of 0.80. What is the required rate of return on the new portfolio?

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Financial Management: You manage a 20m mutual fund that has a beta of 140 and a
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