Suppose you are the money manager of a $4.84 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 420,000 1.50 B (0.50) с 400,000 1,320,000 2,700,000 1.25 D 0.75 If the market's required rate of return is 11% 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.

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
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Suppose you are the money manager of a $4.84 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock
Investment
Beta
1.50
A
B
$ 420,000
400,000
1,320,000
(0.50)
1.25
C
D
2,700,000
0.75
If the market's required rate of return is 11% 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.
%
Transcribed Image Text:Suppose you are the money manager of a $4.84 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta 1.50 A B $ 420,000 400,000 1,320,000 (0.50) 1.25 C D 2,700,000 0.75 If the market's required rate of return is 11% 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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