Question

Suppose you are the money manager of a $4.06 million investment fund. The fund consists of four stocks with the following investments and betas:

Stock	Investment		Beta
A	$   380,000		1.50
B	600,000		(0.50	)
C	1,380,000		1.25
D	1,700,000		0.75

If the market's required rate of return is 11% 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.

Answer 1

wieghet coverage. Betci = 2 Berax investment 3 investment = (15*380000) +CD.Sx609000) + (1.25x1389050) + 10.75x1700000 2 (380000 + 600000-71320,000+700000 = 570000 +(-3,00.000] +17,25000+ 1275000 1 4060,000 32.70,000 40,60,000 3 0 .81 Fund's Required Reite of Return: ER RE RRM-Rf) 6 + 0.81 C11-6 6 + 4.05 I 110.05.10

I hope my efforts will be fruitful to you...☺️