The expected rate of return on the market portfolio is 14.50% and the risk–free rate of return is 3.95%. The standard deviation of the market portfolio is 18.50%. Stock A has a beta of 1.75 and a standard deviation of return of 44%. Stock B has a beta of 3.95 and a standard deviation of return of 72%. Assume that you form a portfolio that is 60% invested in Stock A and 40% invested in Stock B. According to CAPM, what is the expected rate of return on your portfolio? Enter your answer rounded to two decimal places. Do not enter % in the answer box. For example, if your answer is 0.12345 or 12.345% then enter as 12.35 in the answer box.
