Question
Suppose you are the money manager of a $4.02 million investment fund. The fund consists of four stocks with the following investments and betas: Stock
Suppose you are the money manager of a $4.02 million investment fund. The fund consists of four stocks with the following investments and betas:
| Stock | Investment | Beta | ||
| A | $ 460,000 | 1.50 | ||
| B | 300,000 | (0.50 | ) | |
| C | 1,560,000 | 1.25 | ||
| D | 1,700,000 | 0.75 | ||
If the market's required rate of return is 8% and the risk-free rate is 5%, 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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Behavioral Finance And Asset Prices
Authors: David Bourghelle, Pascal Grandin, Fredj Jawadi, Philippe Rozin
1st Edition
3031244850, 978-3031244858
