Question

5)

Suppose you are the money manager of a $4.16 million investment fund. The fund consists of four stocks with the following investments and betas:

Stock |
Investment |
Beta |
||

A | $ 280,000 | 1.50 | ||

B | 800,000 | (0.50 | ) | |

C | 1,080,000 | 1.25 | ||

D | 2,000,000 | 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? Do not round intermediate calculations. Round your answer to two decimal places.

6)

Given the following information, determine the beta coefficient
for Stock L that is consistent with equilibrium: =
10.5%; r_{RF} = 5.5%; r_{M} = 10.5%. Round your
answer to two decimal places.

Answer #1

Suppose you are the money manager of a $4.16 million investment
fund. The fund consists of four stocks with the following
investments and betas:
Stock
Investment
Beta
A
$ 380,000
1.50
B
800,000
(0.50
)
C
1,180,000
1.25
D
1,800,000
0.75
If the market's required rate of return is 9% and the risk-free
rate is 4%, 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 $4.06 million investment
fund. The fund consists of four stocks with the following
investments and betas:
Stock
Investment
Beta
A
$ 280,000
1.50
B
500,000
(0.50
)
C
1,580,000
1.25
D
1,700,000
0.75
If the market's required rate of return is 8% and the risk-free
rate is 4%, 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 $5.06 million investment
fund. The fund consists of four stocks with the following
investments and betas:
Stock
Investment
Beta
A
$580,000
1.50
B
$800,000
(0.50)
C
$1,280,000
1.25
D
$2,400,000
0.75
If the market's required rate of return is 9% and the risk-free
rate is 4%, 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 $4.12 million investment
fund. The fund consists of four stocks with the following
investments and betas:
Stock
Investment
Beta
A
$ 460,000
1.50
B
800,000
(0.50
)
C
1,160,000
1.25
D
1,700,000
0.75
If the market's required rate of return is 13% 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 $4.36 million investment
fund. The fund consists of four stocks with the following
investments and betas:
Stock
Investment
Beta
A
$ 380,000
1.50
B
700,000
(0.50
)
C
980,000
1.25
D
2,300,000
0.75
If the market's required rate of return is 9% and the risk-free
rate is 4%, 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 $4.46 million investment
fund. The fund consists of four stocks with the following
investments and betas:
Stock
Investment
Beta
A
$ 580,000
1.50
B
400,000
(0.50
)
C
1,180,000
1.25
D
2,300,000
0.75
If the market's required rate of return is 8% and the risk-free
rate is 5%, 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 $4.98 million investment
fund. The fund consists of four stocks with the following
investments and betas:
stock
investment
beta
a
$540,000
1.50
b
700,000
(0.50)
c
1,040,000
1.25
d
2,700,000
0.75
If the market's required rate of return is 11% 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 $5.28 million investment
fund. The fund consists of four stocks with the following
investments and betas:
Stock
Investment
Beta
A
$ 440,000
1.50
B
600,000
(0.50
)
C
1,540,000
1.25
D
2,700,000
0.75
If the market's required rate of return is 9% 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 $4.41 million investment
fund. The fund consists of four stocks with the following
investments and betas:
Stock
Investment
Beta
A
$ 360,000
1.50
B
380,000
(0.50)
C
1,220,000
1.25
D
2,450,000
0.75
If the market's required rate of return is 8% and the risk-free
rate is 5%, 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 $4.94 million investment
fund. The fund consists of four stocks with the following
investments and betas: Stock Investment Beta A $ 240,000 1.50 B
380,000 (0.50) C 1,420,000 1.25 D 2,900,000 0.75 If the market's
required rate of return is 12% and the risk-free rate is 4%, 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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