Question
Suppose you are the money manager of a $4.48 million investment fund. The fund consists of 4 stocks with the following investments and betas: Stock
Suppose you are the money manager of a $4.48 million investment fund. The fund consists of 4 stocks with the following investments and betas:
| Stock | Investment | Beta |
| A | $ 240,000 | 1.50 |
| B | 760,000 | - 0.50 |
| C | 1,380,000 | 1.25 |
| D | 2,100,000 | 0.75 |
If the market's required rate of return is 12% and the risk-free rate is 6%, what is the fund's required rate of return? Round your answer to two decimal places.
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Principles Of Corporate Finance Law
Authors: Eilis Ferran, Look Chan Ho
2nd Edition
0199671354, 978-0199671359
