Question
Suppose you are the money manager of a $4.54 million investment fund. The fund consists of four stocks with the following investments and betas: Stock
Suppose you are the money manager of a $4.54 million investment fund. The fund consists of four stocks with the following investments and betas:
| Stock | Investment | Beta | ||
| A | $ 320,000 | 1.50 | ||
| B | 600,000 | (0.50 | ) | |
| C | 1,220,000 | 1.25 | ||
| D | 2,400,000 | 0.75 | ||
If the market's required rate of return is 10% and the risk-free rate is 4%, 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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Principles Of Managerial Finance Brief
Authors: Chad J. Zutter, Scott B. Smart
8th Global Edition
1292267143, 978-1292267142
