Question
help with both questions please.. im lost and need help! Question 6: suppose you are the money manager of a $3.96 million investment fund. The
help with both questions please.. im lost and need help!
Question 6: suppose you are the money manager of a $3.96 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock | Investment | Beta | ||
A | $ 380,000 | 1.50 | ||
B | 400,000 | (0.50 | ) | |
C | 1,180,000 | 1.25 | ||
D | 2,000,000 | 0.75 |
If the market's required rate of return is 12% and the risk-free rate is 5%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
______%
Question 10: Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 2.25. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 1.0 for $7,500 and use the proceeds to buy another stock with a beta of 1.20. What would your portfolio's new beta be? Do not round intermediate calculations. Round your answer to two decimal places.
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