Assume that you manage a $10.00 million mutual fund that has a beta of 1.05 and a 9.50% required return. The risk-free rate is 2.20%.
Assume that you manage a $10.00 million mutual fund that has a beta of 1.05 and a 9.50% required return. The risk-free rate is 2.20%. You now receive another $6.25 million, which you invest in stocks with an average beta of 0.65. What is the required rate of return on the new portfolio? PLEASE SHOW WORK
8.14%
5.11%
6.66%
6.72%
8.2%
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Authors: Louis Gapenski
5th Edition
1567936113, 978-1567936117
