Question
Suppose you are the money manager of a $4.82 million investment fund. The fund consists of 4 stocks with the following investments and betas: Stock
Suppose you are the money manager of a $4.82 million investment fund. The fund consists of 4 stocks with the following investments and betas:
| Stock | Investment | Beta |
| A | $ 460,000 | 1.50 |
| B | 500,000 | - 0.50 |
| C | 1,260,000 | 1.25 |
| D | 2,600,000 | 0.75 |
If the market's required rate of return is 8% and the risk-free rate is 4%, what is the fund's required rate of return? Round your answer to two decimal places.
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Measurement And Internal Audit Operations
Authors: Andrew Fight
1st Edition
184112401X, 978-1841124018
