Question
Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of
Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00% and the risk-free rate is 2.00%. What rate of return should investors expect (and require) on this fund? Do not round your intermediate calculations.
| Stock | Amount | Beta | ||
| A | $525,000 | 1.20 | ||
| B | $675,000 | 0.50 | ||
| C | $1,300,000 | 1.40 | ||
| D | $500,000 | 0.75 | ||
| $3,000,000 |
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Cornerstones of Financial and Managerial Accounting
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
2nd edition
978-1111879044
