Question
7.7 Suppose you are the money manager of a $4.22 million investment fund. The fund consists of four stocks with the following investments and betas:
7.7
Suppose you are the money manager of a $4.22 million investment fund. The fund consists of four stocks with the following investments and betas:
| Stock | Investment | Beta | ||
| A | $ 560,000 | 1.50 | ||
| B | 600,000 | (0.50 | ) | |
| C | 1,260,000 | 1.25 | ||
| D | 1,800,000 | 0.75 | ||
If the market's required rate of return is 11% and the risk-free rate is 4%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
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Essential Mathematics For Economic Analysis
Authors: Knut Sydsaeter, Peter Hammond
3rd Edition
0273713248, 9780273713241
