Question
Suppose you are the money manager of a $4.64 million investment fund. The fund consists of four stocks with the following investments and betas: Stock
Suppose you are the money manager of a $4.64 million investment fund. The fund consists of four stocks with the following investments and betas:
| Stock | Investment | Beta | ||
| A | $ 520,000 | 1.50 | ||
| B | 300,000 | (0.50 | ) | |
| C | 1,020,000 | 1.25 | ||
| D | 2,800,000 | 0.75 | ||
If the market's required rate of return is 9% 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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Fundamentals Of Multinational Finance
Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman
1st Edition
0201844842, 978-0201844849
