Suppose you are the money manager of a $4.93 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Beta A $ 320,000 B C 620,000 1,340,000 2,650,000 D 0.75 If the market's required rate of return is 10% 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. % Investment 1.50 (0.50) 1.25
Suppose you are the money manager of a $4.93 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Beta A $ 320,000 B C 620,000 1,340,000 2,650,000 D 0.75 If the market's required rate of return is 10% 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. % Investment 1.50 (0.50) 1.25
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 10P
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![Suppose you are the money manager of a $4.93 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock
Investment
A
$ 320,000
620,000
B
C
1,340,000
D
2,650,000
0.75
If the market's required rate of return is 10% 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.
%
Beta
1.50
(0.50)
1.25](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F04611aa1-c885-4276-87ac-a88b28730c20%2F68e4078d-822c-46d9-aeec-47c81e21b5aa%2Fahhoj3_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose you are the money manager of a $4.93 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock
Investment
A
$ 320,000
620,000
B
C
1,340,000
D
2,650,000
0.75
If the market's required rate of return is 10% 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.
%
Beta
1.50
(0.50)
1.25
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