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 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

750,000

1.40

D

500,000

0.75

$3,000,000