(Quantitative Question) Assume that you manage a $10.75 million mutual fund that has a beta of 1.05 and a 9.50% required (expected) return. The risk-free rate is 496. You now receive another $5.7 million, which you invest in stocks with an average beta of 0.65. What is the expected return on the new portfolio?
(Quantitative Question) Assume that you manage a $10.75 million mutual fund that has a beta of 1.05 and a 9.50% required (expected) return. The risk-free rate is 496. You now receive another $5.7 million, which you invest in stocks with an average beta of 0.65. What is the expected return on the new portfolio?
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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(Quantitative Question) Assume that you manage a $10.75 million mutual fund that has a beta of 1.05 and a 9.50% required (expected) return. The risk-free rate is
496. You now receive another $5.7 million, which you invest in stocks with an average beta of 0.65. What is the expected return on the new portfolio?
Write the answer both
in the space provided and
the empty pages on which you will also show your work.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1928993b-4ddc-4a8d-8bba-96280167c708%2Fa03e628d-ce47-4de9-b2df-0dfc33b0f3c6%2F5ha45va_processed.jpeg&w=3840&q=75)
Transcribed Image Text:QUESTION 3
(Quantitative Question) Assume that you manage a $10.75 million mutual fund that has a beta of 1.05 and a 9.50% required (expected) return. The risk-free rate is
496. You now receive another $5.7 million, which you invest in stocks with an average beta of 0.65. What is the expected return on the new portfolio?
Write the answer both
in the space provided and
the empty pages on which you will also show your work.
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