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Suppose you are the money manager of a $5.14 million investment fund. The fund consists of...

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Finance

Suppose you are the money manager of a $5.14 million investmentfund. The fund consists of four stocks with the followinginvestments and betas:

StockInvestmentBeta
A$   420,0001.50
B700,000(0.50)
C1,020,0001.25
D3,000,0000.75

If the market's required rate of return is 13% and the risk-freerate is 5%, what is the fund's required rate of return? Do notround intermediate calculations. Round your answer to two decimalplaces.

%

Answer & Explanation Solved by verified expert
4.4 Ratings (692 Votes)
a Calculationof portfolio betaThe beta of a portfolio is the weighted average beta of thesecurities    See Answer
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Suppose you are the money manager of a $5.14 million investmentfund. The fund consists of four stocks with the followinginvestments and betas:StockInvestmentBetaA$   420,0001.50B700,000(0.50)C1,020,0001.25D3,000,0000.75If the market's required rate of return is 13% and the risk-freerate is 5%, what is the fund's required rate of return? Do notround intermediate calculations. Round your answer to two decimalplaces.%

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