suppose you are the money manager of a $4.88 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment A $ 260,000 B 640,000 C 1,180,000 D 2,800,000 0.75 If the market's required rate of return is 10% 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. % Beta 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 $4.88 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock
Investment
A
$ 260,000
B
640,000
с
1,180,000
D
2,800,000
0.75
If the market's required rate of return is 10% 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.
%
Beta
1.50
(0.50)
1.25
Transcribed Image Text:Suppose you are the money manager of a $4.88 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment A $ 260,000 B 640,000 с 1,180,000 D 2,800,000 0.75 If the market's required rate of return is 10% 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. % Beta 1.50 (0.50) 1.25
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