Question: Please help and explain how to do this problems Suppose you are the money manager of a $4.79 million investment fund. The fund consists of

Please help and explain how to do this problems

Please help and explain how to do this problems Suppose you arethe money manager of a $4.79 million investment fund. The fund consistsof four stocks with the following investments and betas: Stock Investment Beta

Suppose you are the money manager of a $4.79 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $300,000 1.50 (0.50) 600,000 P 1.25 C 1,340,000 D 2,550,000 0.75 If the market's required rate of return is 9% and the risk-free rate is 6%, what the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. Stocks A and B have the following probability distributions of expected future returns: Probability A B (14%) (40%) 0.2 0.2 0.3 22 10 0.2 19 25 0.1 30 38 8.20%.) Do not round intermediate calculations. Round your answer to two decimal places. a. Calculate the expected rate of return, rB, for Stock B (rA % b. Calculate the standard deviation of expected returns, oA, for Stock A (aB 26.07%.) Do not round intermediate calculations. Round your answer to two decimal places. % c. Now calculate the coefficient of variation for Stock B. Round your answer to two decimal places. d. Is it possible that most investors might regard Stock B as being less risky than Stock A? I If Stock B is more highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense. II If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock nd bence be just as risky in a portfolio sense. III. If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense. IV. If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense. higher beta than Stock A, and hence be less risky in a portfolio sense. V. If Stock B is more highly correlated with the market than A, then it might have Quantitative Problem: You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta $250,000 1.15 A 150,000 1.6 500,000 0.8 -0.15 100,000 Total investment $1,000,000 The market's required return is 11% and the risk-free rate is 3%. What is the portfolio's required return? Round your answer to 3 decimal places. Do not round intermediate calculations. %

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