Question
Suppose you manage a $110,000,000 fund that consists of four stocks with the following investments: Stock Investment Beta A $37,312,000 -1.48 B $15,675,000 -2.18 C
Suppose you manage a $110,000,000 fund that consists of four stocks with the following investments:
| Stock | Investment | Beta |
| A | $37,312,000 | -1.48 |
| B | $15,675,000 | -2.18 |
| C | $22,000,000 | 1.02 |
| D | $15,950,000 | 6.92 |
| E | $15,400,000 | 0.71 |
| F | $3,663,000 | 0.34 |
If the market's required rate of return is 15.0% and the risk-free rate is 5.0%, what is the fund's required rate of return?, what is the beta of the fund (portfolio)?
| 0.6379 | ||
| 0.0296 | ||
| 0.4395 | ||
| 0.5055 | ||
| 1.7634 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Reporting Financial Statement Analysis And Valuation
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
10th Edition
0357722094, 978-0357722091
