F1 3. Consider the following information, and then calculate the required rate of return for theScientific Investment Fund. The total investment in the fund is $2 million. The market requiredrate of return is 15 percent, and the risk-free rate is 7 percent.StockABC DInvestmentBeta$ 200,0001.50300,000-0.50500,0001.251,000,0000.75

Calculation of required rate of return of scientific investment:StockInvestmentBetaRisk free rate…

Answered: 3. Consider the following information,…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

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What is the fund's required rate of return on these financial accounting question?
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Consider a borrow-and-invest strategy in which you use $1 million of your own money and borrow another $1 million (at the t-bill rate) to invest $2 million in a market index fund. If the risk free interest rate is 5.57 percent and the expected rate of return on the market index fund is 12.35 percent, what is the expected return on this borrow-and-invest strategy?
Consider the following information for the Alachua Retirement Fund, with a total investment of $4 million. The market required rate of returnis 12%, and the risk-free rate is 6%. What is its required rate of return? Stock Investment Beta A $500,000 1.2 B 500,000 -0.4 C 1,000,000 1.5 D 2,000,000 0.8 Total 4,000,000 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Suppose that during the most recent 10 year period, the average annual total rate of return on the aggregate market portfolio, namely the All Ordinaries Accumulation Index, was 12 per cent, its standard deviation was 10 per cent, and the average annual risk free rate of return was 5 per cent. You are evaluating the following funds: Fund Beta A B с Average Annual Rate of Return% 12 6 8 b) c) 0.90 1.05 1.20 Standard Deviation % 5.5 10.0 7.5 a) Calculate the Jensen performance measure for each of the funds. Your method of calculation must be clear. On the basis of the Jensen measure, which fund performed the worst? For Fund A, provide an interpretation of the Jensen performance measure you calculated. Briefly explain.
Consider the following risk-return characteristics for funds A and B: Expected return Risk Fund A (Equity) 12% 20% Fund B (Debt) 9% 16% The correlation coefficient between the returns of fund A and fund B is 0.4. 1. Which Fund is riskier? Write 1 if your answer is Fund A, write 2 if your answer is Fund B, or write 3 if your answer is undetermined. 2.1 What is the weight of fund A in the minimum variance portfolio? 2.4 What is the risk of the minimum variance portfolio? 2.2 What is the weight of Fund B in the minimum variance portfolio? 2.3 What is the expected return of the minimum variance portfolio?
Suppose you are the money manager of a $4.82 millioninvestment fund. The fund consists of four stocks with the following investments and betas:Stock Investment BetaA $ 460,000 1.50B 500,000 (0.50)C 1,260,000 1.25D 2,600,000 0.75 If the market’s required rate of return is 8% and the risk-free rate is 4%, what is the fund’srequired rate of return?8-8 BETA COEFFICIENT Given t
Consider the following information and then calculate the required rate of return for the Universal Investment Fund, which holds 4 stocks. The market's required rate of return is 13.25%, the risk-free rate is 7.00%, and the Fund's assets are as follows: Stock Investment Beta A $200,000 1.5 B $300,000 -0.5 C $500,000 1.25 D $1,000,000 0.75
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