Find out the required rate of return for the portfolio, Finance Basics

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Find out the required rate of return for the portfolio

Problem:

A diversified portfolio has a standard deviation of 20 percent, and the standard deviation for the market portfolio is 13 percent. The risk-free rate is 6 percent, and the expected return for the market portfolio is 12.5 percent.

Required:

Question: What is the required rate of return for the portfolio?

Note: Please show how to work it out.

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Finance Basics: Find out the required rate of return for the portfolio

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Finance Basics: Find out the required rate of return for the portfolio

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