The risk-free rate is 6% and the market risk premium is 5%.Your $1 million portfolio consists of $700,000 invested in a stock that has a beta of 1.2 and $300,000 invested in a stock that has a beta of 0.8.Which of the following statements is correct?
A)If the stock market is efficient, your portfolio's expected return should equal the expected return on the market, which is 11%.
B)The required return on the market is 10%.
C)The portfolio's required return is less than 11%.
D)If the risk-free rate remains unchanged but the market risk premium increases by 2%, your portfolio's required return will increase by more than 2%.

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The Answer of The risk-free rate is 6% and the market risk premium is 5%.Your $1 million portfolio consists of $700,000 invested in a stock that has a beta of 1.2 and $300,000 invested in a stock that has a beta of 0.8.Which of the following statements is correct?
A)If the stock market is efficient, your portfolio's expected return should equal the expected return on the market, which is 11%.
B)The required return on the market is 10%.
C)The portfolio's required return is less than 11%.
D)If the risk-free rate remains unchanged but the market risk premium increases by 2%, your portfolio's required return will increase by more than 2%.

The Risk-Free Rate Is 6% and the Market Risk Premium