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 | 300,000 | (0.50 | ) | |
| C | 1,520,000 | 1.25 | ||
| D | 2,200,000 | 0.75 | ||
If the market's required rate of return is 12% 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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Finance Applications And Theory
Authors: Marcia Cornett, Troy Adair, John Nofsinger
2nd Edition
0073530670, 9780073530673
