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Joel Foster is the portfolio manager of the SF Fund, a $3.5 million hedge fund that contains the following stocks. The required rate of return

Joel Foster is the portfolio manager of the SF Fund, a $3.5 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 5.00%. What rate of return should investors expect (and require) on this fund?

Stock Amount Beta
A $1,075,000 1.20
B 675,000 0.50
C 1,250,000 1.40
D 500,000 0.75
3,500,000

Select the correct answer.

a. 11.33%
b. 11.38%
c. 11.43%
d. 11.48%
e. 11.53%

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