Question $5(1$ point$)$

Suppose you are the money manager of a million dollar investment fund. The fund consists of four stocks with the following investments and betas:

$\backslash$table$[[$Stock$,$Investment,Beta$],[$Alpha$,$$$575,000,-1\mathrm{.}50],[$Bingo$,$$$50,000,-1\mathrm{.}00],[$Charlie$,$$$250,000,0\mathrm{.}50],[$Delta$,$$$125,000,2\mathrm{.}00]]$

a$)$ Calculate the fund's beta.

b$)$ If the market's required rate of return is $10\%$ and the risk$-$free rate is $3\%,$ what is the fund's required rate of return?

a$)-0\mathrm{.}54$ ; b$)-0\mathrm{.}76\%$

a$)0\mathrm{.}00$ ; b$)3\mathrm{.}00\%$

a$)0\mathrm{.}54$ ; b$)6\mathrm{.}76\%$

a$)1\mathrm{.}25$ ; b$)11\mathrm{.}75\%$

a$)1\mathrm{.}29$ ; b$)12\mathrm{.}01\%$

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