View the step-by-step solution to:

Question

PORTFOLIO REQUIRED RETURN

Suppose you are the money manager of a $4.93 million investment

fund. The fund consists of four stocks with the following investments and betas:


Stock A B C D


Investment $   280,000  $ 740,000    1,260,000     2,650,000


Beta 1.50 (0.50) 1.25 0.75




If the market's required rate of return is 11% and the risk-free rate is 7%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.


= %

Top Answer

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question