Question
PORTFOLIO REQUIRED RETURN: Suppose you are the money manager of a $4.82 million investment fund. The fund consists of four stocks with the following investments
PORTFOLIO REQUIRED RETURN: Suppose you are the money manager of a $4.82 million investment fund. The fund consists of four stocks with the following investments and betas;
| Stock | Investment | Beta |
| A | $460,000 | 1.50 |
| B | 500,000 | (0.50) |
| C | 1,260,000 | 1.25 |
| D | 2,600,000 | 0.75 |
If the markets required rate of return is 8% and the risk-free rate is 4%, what is the funds required rate of return?
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Handbook Of The Economics Of Finance
Authors: George M. Constantinides, Milton Harris, Rene M. Stulz
1st Edition
044459406X, 978-0444594068
