Suppose you are the money manager of a $4.74 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 460,000 1.50 B 580,000 (0.50) C 1,500,000 1.25 D 2,200,000 0.75 If the market's required rate of return is 9% 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.
Suppose you are the money manager of a $4.74 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 460,000 1.50 B 580,000 (0.50) C 1,500,000 1.25 D 2,200,000 0.75 If the market's required rate of return is 9% 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.
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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Suppose you are the money manager of a $4.74 million investment fund. The fund consists of four stocks with the following investments and betas:
| Stock | Investment | Beta |
| A | $ 460,000 | 1.50 |
| B | 580,000 | (0.50) |
| C | 1,500,000 | 1.25 |
| D | 2,200,000 | 0.75 |
If the market's required
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