Question
8-7. PORTFOLIO REQUIRED RETURN: Suppose you are the money manager of a $4.82 million investment fund. The fund consists of four stocks with the following
8-7. PORTFOLIO REQUIRED RETURN: Suppose you are the money manager of a $4.82 million investment fund. The fund consists of four stocks with the following investments and betas.
| STOCK | INVESTMENT | BETA |
| A | $460,000 | 1.50 |
| B | $500,000 | (0.50) |
| C | $1,260,000 | 1.25 |
| D | $2,600,000 | 0.75 |
If the market's required rate of return is 8%, and the risk-free rate is 4%, what is the fund's required rate of return?
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Analysis for Financial Management
Authors: Robert Higgins
11th edition
77861787, 978-0077861780
