Suppose you are the money manager of a $5.16 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 280,000 1.50 B 400,000 (0.50 ) C 1,580,000 1.25 D 2,900,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 3%, 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 $5.16 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 280,000 1.50 B 400,000 (0.50 ) C 1,580,000 1.25 D 2,900,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 3%, 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 $5.16 million investment fund. The fund consists of four stocks with the following investments and betas:
| Stock | Investment | Beta | ||
| A | $ 280,000 | 1.50 | ||
| B | 400,000 | (0.50 | ) | |
| C | 1,580,000 | 1.25 | ||
| D | 2,900,000 | 0.75 |
If the market's required
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