Question

Suppose you manage a $4.86 million fund that consists of four stocks with the following investments:...

Suppose you manage a $4.86 million fund that consists of four stocks with the following investments:

Stock Investment Beta
A $360,000 1.50
B 600,000 -0.50
C 1,300,000 1.25
D 2,600,000 0.75

If the market's required rate of return is 13% 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.

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Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

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