Suppose you are the money manager of a $4.07 million investment fund. The fund consists of four
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Question:
Suppose you are the money manager of a $4.07 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock | Investment | Beta |
A | $ 240,000 | 1.50 |
B | 560,000 | (0.50) |
C | 1,420,000 | 1.25 |
D | 1,850,000 | 0.75 |
If the market's required rate of return is 12% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
Related Book For
Fundamentals of Financial Management
ISBN: 978-1305635937
Concise 9th Edition
Authors: Eugene F. Brigham
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