Suppose you are the money manager of a $5.04 million investment fund. The fund consists of four stocks with the following investments änd Bêtas! Stock Investment Beta $ 420,000 1.50 A 680,000 (0.50) * 1,140,000 1.25 2,800,000 0.75 If the market's required rate of return is 8% 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 $5.04 million investment fund. The fund consists of four stocks with the following investments änd Bêtas! Stock Investment Beta $ 420,000 1.50 A 680,000 (0.50) * 1,140,000 1.25 2,800,000 0.75 If the market's required rate of return is 8% 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. %
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 $5.04 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock
Investment
Beta
A
$ 420,000
1.50
В
680,000
(0.50)
C
A 1,140,000
1.25
D
2,800,000
0.75
If the market's required rate of return is 8% 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.
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F552bce27-2e42-4405-9478-45c26e7ea34f%2F1dc012cb-b2f0-4bd0-bdbd-a67ba0e3f80e%2Fgto79w7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose you are the money manager of a $5.04 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock
Investment
Beta
A
$ 420,000
1.50
В
680,000
(0.50)
C
A 1,140,000
1.25
D
2,800,000
0.75
If the market's required rate of return is 8% 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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