Question
Suppose you are the money manager of a $4.24 million investment fund. The fund consists of four stocks with the following investments and betas: Stock
Suppose you are the money manager of a $4.24 million investment fund. The fund consists of four stocks with the following investments and betas:
| Stock | Investment | Beta | ||
| A | $ 220,000 | 1.50 | ||
| B | 600,000 | (0.50 | ) | |
| C | 1,220,000 | 1.25 | ||
| D | 2,200,000 | 0.75 | ||
If the market's required rate of return is 11% 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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Elements Of Structured Finance
Authors: Ann Rutledge, Sylvain Raynes
1st Edition
0195179986, 978-0195179989
