Portfolio Required ReturnSuppose you manage a $4.71 million fund that consists of four stocks with the following investments:StockInvestmentBetaA$260,000 1.50B450,000 -0.50C1,300,000 1.25D2,700,000 0.75If the market's required rate of return is 12% 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.______%

Portfolio required return helps in calculating the anticipated profit and losses from portfolio of…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Portfolio Required Return

Suppose you manage a $4.71 million fund that consists of four stocks with the following investments:

Stock	Investment	Beta
A	$260,000		1.50
B	450,000		-0.50
C	1,300,000		1.25
D	2,700,000		0.75

If the market's required rate of return is 12% 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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