Question
25. Portfolio required return Suppose you are the money manager of a $4.88 million investment fund. The fund consists of 4 stocks with the following
25.
Portfolio required return
Suppose you are the money manager of a $4.88 million investment fund. The fund consists of 4 stocks with the following investments and betas:
| Stock | Investment | Beta |
| A | $360,000 | 1.50 |
| B | 720,000 | - 0.50 |
| C | 1,100,000 | 1.25 |
| D | 2,700,000 | 0.75 |
If the market's required rate of return is 12% and the risk-free rate is 7%, what is the fund's required rate of return? Round your answer to two decimal places.
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Foundations Of Finance
Authors: Arthur J Keown, John D Martin, J William Petty
7th Edition
0133370356, 9780133370355
