Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. suppose you are the money manager of a $5.14 milli

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

70.2K

Verified Solution

Question

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
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

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.%

Other questions asked by students

Q

Briefly summarize the history of Sanskrit Language and its impact on Indian culture since the ancient...

Psychology
Q

d rt Format Box 8 and try How do you undo multi multiply by t...

Geometry
Q

The coming together of information system architecture is not influenced by organizational objectives and strategies...

Basic Math
Q

Suppose that x represents one of two positive numbers whose sum is 14.(a) Represent the...

Basic Math
Q

In 1990 the average family income was about 36000, and in 2000 it was about...

Algebra
Q

3 5 O search 3 81 A 2 3x C 2x 3x 5 54m A...

Algebra
Q

Merchandise Inventory appears on both the Income Statement and the Balance Sheet. True False

Accounting
Q

2. Rock Corporation has the following shares outstanding: 8,000 shares of $40 par value, ten...

Accounting
Q

Yowell Company began operations on January 1, Year 1 . During Year 1 , the...

Accounting
Q

It's summer time soon and that means it's time to get your icecream truck business...

Accounting
Q

Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period,...

Accounting
Q

Compare two court cases that have had an impact on educational funding in Rhode Island....

Finance