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(Solved) Problem 8-7 Portfolio required return Suppose you are the money


Problem 8-7?
Portfolio required return

Suppose you are the money manager of a $3.86 million investment fund. The fund consists of 4 stocks with the following investments and betas:

Stock Investment Beta
A $???380,000???????????????????????????????? 1.50
B 420,000???????????????????????????????? - 0.50
C 1,260,000???????????????????????????????? 1.25
D 1,800,000???????????????????????????????? 0.75

If the market's required rate of return is 11% and the risk-free rate is 4%, what is the fund's required rate of return? Round your answer to two decimal places.
?%



 


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Oct 15, 2019

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