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Samantha is the money manager of a R4 000 000 investment fund. The fund consists of four shares with the following investments and betas Share.                                  Investment                        Beta Class A share                        R400 000                        1,50 Class B share                        R600 000                        -0,50 Class C share                        R1 000 000                      1,25 Class D share                        R2 000 000                       0,75     If the market required rate of return is 14% and the risk-free rate is 6%, what is the fund’s required rate of return? 1. 11,90% 2. 12,10% 3. 13,30% 4. 14,67%

Samantha is the money manager of a R4 000 000 investment fund. The fund consists of four shares with the following investments and betas Share.                                  Investment                        Beta Class A share                        R400 000                        1,50 Class B share                        R600 000                        -0,50 Class C share                        R1 000 000                      1,25 Class D share                        R2 000 000                       0,75     If the market required rate of return is 14% and the risk-free rate is 6%, what is the fund’s required rate of return? 1. 11,90% 2. 12,10% 3. 13,30% 4. 14,67%

Essentials Of Investments
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
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Samantha is the money manager of a R4 000 000 investment fund. The fund consists of four shares with the following investments and betas

Share.                                  Investment                        Beta

Class A share                        R400 000                        1,50

Class B share                        R600 000                        -0,50

Class C share                        R1 000 000                      1,25

Class D share                        R2 000 000                       0,75

 

 

If the market required rate of return is 14% and the risk-free rate is 6%, what is the fund’s required rate of return?

1. 11,90%

2. 12,10%

3. 13,30%

4. 14,67%

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