Required Rate of Return
Suppose rRF = 5%, rM = 9%, andrA = 15%.
- Calculate Stock A's beta. Round your answer to two decimalplaces.
- If Stock A's beta were 1.8, then what would be A's new requiredrate of return? Round your answer to two decimal places.
%
Portfolio Required Return
Suppose you manage a $3.925 million fund that consists of fourstocks with the following investments:
| Stock | Investment | Beta |
| A | $320,000 | | 1.50 |
| B | 575,000 | | -0.50 |
| C | 980,000 | | 1.25 |
| D | 2,050,000 | | 0.75 |
If the market's required rate of return is 9% and the risk-freerate is 6%, what is the fund's required rate of return? Do notround intermediate calculations. Round your answer to two decimalplaces.
%
