Joel Foster is 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 10.00% 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	750,000	1.40
D	500,000	0.75
	$3,000,000

Answers:	a. 10.09%
	b. 12.12%
	c. 12.38%
	d. 13.67%
	e. 11.11%