Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

An individual has $ 3 5 , 0 0 0 invested in a stock with a beta of 0 . 4 and another $ 6

An individual has $35,000 invested in a stock with a beta of 0.4 and another $65,000 invested in a stock with a beta of 1.1. If these are the only two investments in her portfolio, what is her portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.
-------------------------------------------------
Assume that the risk-free rate is 4.5% and the required return on the market is 11%. What is the required rate of return on a stock with a beta of 3? Round your answer to two decimal places.
-------------------------------------------------
Suppose you are the money manager of a $4.08 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock Investment Beta
A $ 340,0001.50
B 600,000(0.50)
C 1,140,0001.25
D 2,000,0000.75
If the market's required rate of return is 12% 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial And Managerial Accounting For MBAs

Authors: Peter D. Easton

6th Edition

9781618533593

Students also viewed these Finance questions