3. Consider the following information, and then calculate the required rate of return for the Scientific Investment Fund. The total investment in the fund is $2 million. The market required rate of return is 15 percent, and the risk-free rate is 7 percent. Stock ABC D Investment Beta $ 200,000 1.50 300,000 -0.50 500,000 1.25 1,000,000 0.75
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- Hi can you help with this question please? An investment has the following cash flow profile. For each value of MARR below, what is the minimum value of X such that the investment is attractive based on an internal rate of return measure of merit? EOY 0 1 2 3 4 Cash Flow $(30,000.00) $ 6,000.00 $ 13,500.00 $X $ 13,500.00 MARR is 12 percent/yearHelp me please5. Consider the following information and calculate the required rate of return for the Scientific Investment Fund. The total investment in the fund is $2 million. Investment $ 200,000 300,000 500,000 1,000,000 The market required rate of return is 15% and the risk-free rate is 7%. Stock A B C D Beta 2.00 0.50 1.25 0.75 bad I
- Consider the following information and then calculate the required rate of return for the Global Investment Fund, which holds 4 stocks. The market's required rate of return is 13.0%, the risk-free rate is 6.00 %, and the Fund's assets are as follows: Stock A B BUD C D 10.58% 11.25% 12.37% 13.18% 13.77% Investment $ 200,000 300,000 500,000 $1,000,000 Beta 2.00 -0.60 1.20 1.004. Suppose you are a money manager of a $10 million investment fund. The fund is invested in three assets with the following investments and betas: Investment Beta 1.80 0.75 1.20 The remainder is invested in T-bills (risk free asset) with 3% return. a. If the market expected rate of return is 9% what is the fund's expected rate of return? b. Using Funds A and B, create a portfolio (report the portfolio weights and $ investment out of $10 million) with a 0.92 beta. Stock A B C $3,000,000 2,000,000 4,000,000Consider the following information for the Alachua Retirement Fund, with a total investment of $4 million. The market required rate of returnis 12%, and the risk-free rate is 6%. What is its required rate of return? Stock Investment Beta A $500,000 1.2 B 500,000 -0.4 C 1,000,000 1.5 D 2,000,000 0.8 Total 4,000,000 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- (10 POINTS) Consider the following funds whose expected returns and volatilities are given in the following table: \table [[Type of fund, Er,, o,, management fee (f) 5. (10 POINTS) Consider the following funds whose expected returns and volatilities are given in the following table: Type of fund Bio tech fund (B) Er σi management fee (f) .40 .60 .04 Critical minerals fund (C) .26 .40 .03 Market portfolio (M) .18 .24 0 where the management fee (f) is the percentage fee for holding the fund. The risk-free rate is 0.04.Is this situation compatible with the CAPM? Justify your answer.Consider a borrow-and-invest strategy in which you use $1 million of your own money and borrow another $1 million (at the t-bill rate) to invest $2 million in a market index fund. If the risk free interest rate is 5.57 percent and the expected rate of return on the market index fund is 12.35 percent, what is the expected return on this borrow-and-invest strategy?Suppose that during the most recent 10 year period, the average annual total rate of return on the aggregate market portfolio, namely the All Ordinaries Accumulation Index, was 12 per cent, its standard deviation was 10 per cent, and the average annual risk free rate of return was 5 per cent. You are evaluating the following funds: Fund Beta A B с Average Annual Rate of Return% 12 6 8 b) c) 0.90 1.05 1.20 Standard Deviation % 5.5 10.0 7.5 a) Calculate the Jensen performance measure for each of the funds. Your method of calculation must be clear. On the basis of the Jensen measure, which fund performed the worst? For Fund A, provide an interpretation of the Jensen performance measure you calculated. Briefly explain.
- Consider the following risk-return characteristics for funds A and B: Expected return Risk Fund A (Equity) 12% 20% Fund B (Debt) 9% 16% The correlation coefficient between the returns of fund A and fund B is 0.4. 1. Which Fund is riskier? Write 1 if your answer is Fund A, write 2 if your answer is Fund B, or write 3 if your answer is undetermined. 2.1 What is the weight of fund A in the minimum variance portfolio? 2.4 What is the risk of the minimum variance portfolio? 2.2 What is the weight of Fund B in the minimum variance portfolio? 2.3 What is the expected return of the minimum variance portfolio?Suppose you are the money manager of a $4.82 millioninvestment fund. The fund consists of four stocks with the following investments and betas:Stock Investment BetaA $ 460,000 1.50B 500,000 (0.50)C 1,260,000 1.25D 2,600,000 0.75 If the market’s required rate of return is 8% and the risk-free rate is 4%, what is the fund’srequired rate of return?8-8 BETA COEFFICIENT Given tConsider a borrow-and-invest strategy in which you use $1 million of your own money and borrow another $1 million (at the t-bill rate) to invest $2 million in a market index fund. If the risk free interest rate is 5.52 percent and the expected rate of return on the market index fund is 12.68 percent, what is the risk premium on this borrow-and-invest strategy?