Question
Suppose you are the money manager of a $4.08 million investment fund. The fund consists of four stocks with the following investments and betas: Stock
Suppose you are the money manager of a $4.08 million investment fund. The fund consists of four stocks with the following investments and betas:
| Stock | Investment | Beta | ||
| A | $ 240,000 | 1.50 | ||
| B | 700,000 | (0.50 | ) | |
| C | 940,000 | 1.25 | ||
| D | 2,200,000 | 0.75 | ||
If the market's required rate of return is 10% 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.
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Financial Management Principles And Applications
Authors: Dr. S. Kr. Paul, Prof. Chandrani Paul
1st Edition
1647251664, 9781647251666
