Assume that you are the portfolio manager of the SF Fund, a $5 million hedge fund that contains the following stocks. The required rate of return on the market is 9.00% and the risk-free rate is 1.50%. What rate of return should investors expect (and require) on this fund? Do not round your intermediate calculations.

Stock		Amount		Beta
A		$1,650,000		1.20
B		$1,350,000		0.50
C		$900,000		1.40
D		$1,100,000		0.75
		$5,000,000

a. 8.72%

b. 8.61%

c. 7.50%

d. 7.11%

e. 10.03%