Suppose you are the money manager of a $4 million investment fund. The fund consists of 4 stocks with the following investments and betas: STOCK A B с D INVESTMENT $ 400,000 600,000 1,000,000 2,000,000 BETA 1.50 (0.50) 1.25 0.75 If the market's required rate of return is 14 percent and the risk-free rate is 6 percent, what is the fund's required rate of return?

Suppose you are the money manager of a $4 million investment fund. The fund consists of 4 stocks with the following investments and betas: STOCK A B с D INVESTMENT $ 400,000 600,000 1,000,000 2,000,000 BETA 1.50 (0.50) 1.25 0.75 If the market's required rate of return is 14 percent and the risk-free rate is 6 percent, what is the fund's required rate of return?

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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