Question
Suppose you are the money manager of a $5.06 million investment fund. The fund consists of four stocks with the following investments and betas: Stock
Suppose you are the money manager of a $5.06 million investment fund. The fund consists of four stocks with the following investments and betas:
| Stock | Investment | Beta |
| A | $580,000 | 1.50 |
| B | $800,000 | (0.50) |
| C | $1,280,000 | 1.25 |
| D | $2,400,000 | 0.75 |
If the market's required rate of return is 9% 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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College Accounting A Contemporary Approach
Authors: David Haddock, John Price, Michael Farina
4th edition
978-1259995057, 1259995054, 978-0077503987, 77503988, 978-0077639730
