Question
Suppose you are the money manager of a $5.3 million investment fund. The fund consists of four stocks with the following investments and betas: Stock
Suppose you are the money manager of a $5.3 million investment fund. The fund consists of four stocks with the following investments and betas:
| Stock | Investment | Beta |
| A | $ 240,000 | 1.50 |
| B | 780,000 | (0.50) |
| C | 1,380,000 | 1.25 |
| D | 2,900,000 | 0.75 |
If the market's required rate of return is 13% and the risk-free rate is 5%, 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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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
