A money manager is holding the following portfolio:
The risk-free rate is 6 percent and the portfolio's required rate of return is 12 percent. The manager would like to sell all of her holdings of Stock 1 and use the proceeds to purchase more shares of Stock 4. What would be the portfolio's required rate of return following this change?

Question

A money manager is holding the following portfolio:
  The risk-free rate is 6 percent and the portfolio's required rate of return is 12 percent. The manager would like to sell all of her holdings of Stock 1 and use the proceeds to purchase more shares of Stock 4. What would be the portfolio's required rate of return following this change?

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The Answer of A money manager is holding the following portfolio:
  The risk-free rate is 6 percent and the portfolio's required rate of return is 12 percent. The manager would like to sell all of her holdings of Stock 1 and use the proceeds to purchase more shares of Stock 4. What would be the portfolio's required rate of return following this change?

A Money Manager Is Holding the Following Portfolio