Asume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 10.00% and the risk-free rate is 1.50%. What rate of return should investors expect (and require) on this fund? Do not round your intermediate calculations. tock Beta Amount $900,000 $780,000 $570,000 $750,000 $3,000,000 1.20 0.50 1.40 0.75

Asume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 10.00% and the risk-free rate is 1.50%. What rate of return should investors expect (and require) on this fund? Do not round your intermediate calculations. tock Beta Amount $900,000 $780,000 $570,000 $750,000 $3,000,000 1.20 0.50 1.40 0.75

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The investment funds for your company includes the following: Stock $ Amount Invested Beta for Each Stock A $ 600,000 .8 B $ 1,800,000 1.4 C $ 2,400,000 1.7 D $ 700,000 -.6 E $ 3,000,000 1.1 You need to calculate the required rate of return for the investment. The market’s required return for Year 2020 is 12% and the risk free rate is 3% Show your work on the following: Calculate the average beta for the portfolio. Calculate the required rate of return for the entire portfolio. The CFO of your company is anticipating that the stock market will be decreasing in the near future. Please give a recommendation on which stock the company should sell and which stock the company should buy. The CFO also wants you to explain your answer.
Quantitative Problem: You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta A $300,000 1.2 B 200,000 1.6 C 400,000 0.75 D 100,000 -0.35 Total investment $1,000,000 The market's required return is 11% and the risk-free rate is 4%. What is the portfolio's required return? Do not round intermediate calculations. Round your answer to three decimal places.
O B *Book Problem Walk Through Suppose you are the money manager of a $4.24 mbon investment fund the fund consists of four stocks with the following investments and beta Stock Beta 1.50 (0.00) 1.25 8.75 W Investment $320,000 500,000 1.320,000 1,000,000 C D the market's required rate of retums 11% and the risk free rate is what is the fund's requered rate of retum De not found intermedate caldabone Round your answer to two decimal place
man.2
5. Problem 8.07 (Portfolio Required Return) Suppose you are the money manager of a $4.48 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A S 340,000 1.50 B 700,000 (0.50) C 940,000 1.25 D 2,500,000 0.75 If the market's required rate of return is 11% and the risk - free rate is 5%, what is the fund's what required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. %
Suppose you manage a $4 million fund that consists of four stocks with the following investments: Beta Stock A 1.50 B -0.50 1.25 C D 0.75 If the market's required rate of return is 14% 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. Investment $400,000 1,000,000 1,600,000 1,000,000 %
3. Problem 8.07 (Portfolio Required Return) BA eBook Problem Walk-Through Suppose you are the money manager of a $5.02 million investment fund. The fund consists of four stocks with the following investments and betas: Investment $ 260,000 600,000 1,560,000 2,600,000 с D If the market's required rate of return is 12% and the risk-free rate is 5%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. % Stock A B Beta 1.50 (0.50) 1.25 0.75
D Suppose you are the money manager of a $4.28 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 340,000 1.50 B 700,000 C D 1,040,000 2,200,000 (0.50) 1.25 0.75 If the market's required rate of return is 12% and the risk-free rate is 5%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. %
A-Z 11. Problem 8.07 (Portfolio Required Return) O Ofice еВook Problem Walk-Through Suppose you are the money manager of a $4.44 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 200,000 1.50 B 300,000 (0.50) 1,340,000 1.25 D 2,600,000 0.75 If the market's required rate of return is 11% and the risk-free rate is 4%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. %

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