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Consider the following information and then calculate the required rate of return for the Universal Investment Fund, which holds 4 stocks. The market's required rate
Consider the following information and then calculate the required rate of return for the Universal Investment Fund, which holds 4 stocks. The market's required rate of return is 13.25%, the risk-free rate is 7.00%, and the Fund's assets are as follows:
Stock | Investment | Beta |
A | $ 150,000 | 1.50 |
B | $ 150,000 | 0.50 |
C | $ 750,000 | 1.25 |
D | $1,050,000 | 0.75 |
The possible solutions to this problem are below.
a. | 12.86% | |
b. | 11.77% | |
c. | 10.62% | |
d. | 12.08% | |
e. | 11.18% |
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