Question: Question 1 10 Points ABC, a mutual fund manager, has a $40 million portfolio with a beta of 0.80. The risk-free rate is 4.00%, and

Question 1 10 Points ABC, a mutual fund manager, has a $40 million portfolio with a beta of 0.80. The risk-free rate is 4.00%, and the market risk premium is 5.00%. ABC expects to receive an additional $60 million, which she plans to invest in additional stocks. After investing the additional funds, she wants the fund's required and expected return to be 8.60%. What must the average beta of the new stocks be to achieve the target required rate of return? A 1.40 B None of the above 1.20 D 0.80 1.10

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