The risk-free rate, kRF, is 2.2 percent and the market risk premium

The risk-free rate, kRF, is 2.2 percent and the market risk premium

The risk-free rate, kRF, is 2.2 percent and the market risk premium, (kM – kRF), is 5 percent. Assume that required returns are based on the CAPM. Your $1 million portfolio consists of $590,000 invested in a stock that has a beta of 1.8 and the remainder invested in a stock that has a beta of 1.0.What is the required return on this portfolio?


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