Suppose you are the money manager of a $4.94 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment S 440,000 700,000 1,300,000 2,500,000 Beta 1.50 (0.50) 1.25 A D 0.75 If the market's required rate of return is 13% and the risk-free rate is 6%, 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 $4.94 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment S 440,000 700,000 1,300,000 2,500,000 Beta 1.50 (0.50) 1.25 A D 0.75 If the market's required rate of return is 13% and the risk-free rate is 6%, 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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Transcribed Image Text:Finance
Suppose you are the money manager of a $4.94 million investment fund. The fund consists of four
stocks with the following investments and betas:
Stock Investment
A
В
Beta
1.50
S 440,000
700,000
1,300,000
2,500,000
(0.50)
1.25
0.75
If the market's required rate of return is 13% and the risk-free rate is 6%, 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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