Suppose you are the money manager of a $4 million investment fund. The fund consists of 4 stocks with the following investments and betas: STOCK A B с D INVESTMENT $ 400,000 600,000 1,000,000 2,000,000 BETA 1.50 (0.50) 1.25 0.75 If the market's required rate of return is 14 percent and the risk-free rate is 6 percent, what is the fund's required rate of return?
Suppose you are the money manager of a $4 million investment fund. The fund consists of 4 stocks with the following investments and betas: STOCK A B с D INVESTMENT $ 400,000 600,000 1,000,000 2,000,000 BETA 1.50 (0.50) 1.25 0.75 If the market's required rate of return is 14 percent and the risk-free rate is 6 percent, what is the fund's required rate of return?
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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Ab. 140.
![6-11 Suppose you are the money manager of a $4 million investment fund. The fund consists
Portfolio required return of 4 stocks with the following investments and betas:
STOCK
A
B
с
D
INVESTMENT
$ 400,000
600,000
1,000,000
2,000,000
BETA
1.50
(0.50)
1.25
0.75
If the market's required rate of return is 14 percent and the risk-free rate is 6 percent,
what is the fund's required rate of return?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4daeda3b-5278-4fa7-b2ce-c352b31ca222%2F31b5a2c4-cfb8-41aa-9de0-fce135ca976f%2F5107lgc_processed.png&w=3840&q=75)
Transcribed Image Text:6-11 Suppose you are the money manager of a $4 million investment fund. The fund consists
Portfolio required return of 4 stocks with the following investments and betas:
STOCK
A
B
с
D
INVESTMENT
$ 400,000
600,000
1,000,000
2,000,000
BETA
1.50
(0.50)
1.25
0.75
If the market's required rate of return is 14 percent and the risk-free rate is 6 percent,
what is the fund's required rate of return?
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