Question
Suppose you are the money manager of a $3.98 million investment fund. The fund consists of four stocks with the following investments and betas: Stock
Suppose you are the money manager of a $3.98 million investment fund. The fund consists of four stocks with the following investments and betas:
| Stock | Investment | Beta |
| A | $ 280,000 | 1.50 |
| B | 300,000 | (0.50) |
| C | 1,100,000 | 1.25 |
| D | 2,300,000 | 0.75 |
If the market's required rate of return is 10% and the risk-free rate is 7%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
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Sport Finance
Authors: Gil Fried, Timothy D. DeSchriver, Michael Mondello
4th Edition
1492559733, 978-1492559733
