Question
Suppose you are the money manager of a $4.93 million investment fund. The fund consists of 4 stocks with the following investments and betas: Stock
Suppose you are the money manager of a $4.93 million investment fund. The fund consists of 4 stocks with the following investments and betas:
| Stock | Investment | Beta |
| A | $460,000 | 1.50 |
| B | 660,000 | - 0.50 |
| C | 1,260,000 | 1.25 |
| D | 2,550,000 | 0.75 |
If the market's required rate of return is 8% and the risk-free rate is 3%, what is the fund's required rate of return?
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Fundamentals of Investments, Valuation and Management
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
8th edition
1259720697, 1259720691, 1260109437, 9781260109436, 978-1259720697
