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8 #7

Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 4.5% rate of inflation in the future. The real risk-free rate is 1.0%, and the market risk premium is 7.5%. Mudd has a beta of 1.8, and its realized rate of return has averaged 12.5% over the past 5 years. Round your answer to two decimal places. 54.75 % Suppose you are the money manager of a $4.72 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $360,000 1.50 B 300,000 (0.50 ) C 1,460,000 1.25 D 2,600,000 0.75 If the market's required rate of return is 9% and the risk-free rate is 5%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. 12.48 %