Assume that you are the portfolio manager of the SF Fund, a $4 million hedge fund that contains the following stocks. The required rate of return on the market is 9.50% and the risk-free rate is 2.50%. What rate of return should investors expect (and require) on this fund? Do not round your intermediate calculations.

Stock		Amount		Beta
A		$1,400,000		1.20
B		$860,000		0.50
C		$1,140,000		1.40
D		$600,000		0.75
		$4,000,000

a. 12.37%

b. 9.77%

c. 7.27%

d. 9.24%

e. 7.00%