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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

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 1.90%. What rate of return should investors expect (and require) on this fund? Do not round your intermediate calculations.

Stock Amount Beta
A $1,260,000 1.20
B $860,000 0.50
C $920,000 1.40
D $960,000 0.75
$4,000,000
a. 11.28%
b. 9.41%
c. 7.60%
d. 7.51%
e. 9.22%

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