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Please answer all questions 4. Problem 8.07 (Portfolio Required Return) eBook Problem Walk-Through Suppose you are the money manager of a $5.24 million investment fund.
Please answer all questions
4. Problem 8.07 (Portfolio Required Return) eBook Problem Walk-Through Suppose you are the money manager of a $5.24 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Beta Investment $ 360,000 1.50 (0.50) 660,000 1,420,000 1.25 2,800,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. 5. Problem 8.09 (Required Rate of Return) eBook Stock R has a beta of 2.2, Stock S has a beta of 0.9, the required return on an average stock is 13%, and the risk-free rate of return is 5%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places. 6. Problem 8.11 (CAPM and Required Return) eBook Problem Walk-Through Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 4.6% rate of inflation in the future. The real risk-free rate is 3.0%, and the market risk premium is 3.5%. Mudd has a beta of 2.6, and its realized rate of return has averaged 12.5% over the past 5 years. Round your answer to two decimal places. %Step by Step Solution
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