Question

Suppose krf = 5%, km = 10%, and βA =1.3, kA=? Suppose krf = 5%, km...

  1. Suppose krf = 5%, km = 10%, and βA =1.3, kA=?
  2. Suppose krf = 5%, km = 10%, and kB =15%, βB =?
  3. Suppose market risk premium (MRP) = 6%, kC = 15%, and Stock C is an average stock (βC = 1.0), km = ?
  4. Suppose you are the money manager of a $20 million investment fund. The fund invests in 3 stocks with the following investments and betas:

Stock     Investment    Beta

                A                   $8 million              1.50

                B                   $7 million              (0.5)

                C                   $5 million              1.25

If the market’s required rate of return is 14% and the risk-free rate is 6%, what is the fund’s required rate of return?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are managing a $4MM investment fund of 4 stocks. If the market’s required rate of...
You are managing a $4MM investment fund of 4 stocks. If the market’s required rate of return is 14% and RRF is 6%, what is the fund’s required rate of return? Stock Investment Beta A $400,000 1.5 B 600,000 -.5 C 1,000,000 1.25 D 2,000,000 .75
A mutual fund has earned an annual average return of 15% over the last 5 years....
A mutual fund has earned an annual average return of 15% over the last 5 years. During that time, the average risk-free rate was 2% and the average market return was 12% per year. The correlation coefficient between the mutual fund’s and market’s returns was 0.7. The standard deviation of returns was 50% for the mutual fund and 22% for the market. What was the fund’s CAPM alpha? a) -2.9% b) -1.3% c) 0.3% d) 1.9% e) 3.5%
Suppose you are the money manager of a $4.36 million investment fund. The fund consists of...
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. 580,000. 1.50 B. 700,000. (0.50) C. 980,000. 1.25 D 2,100,000. 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?
5) Suppose you are the money manager of a $4.16 million investment fund. The fund consists...
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...
1. Quantitative Problem: You are holding a portfolio with the following investments and betas: Stock Dollar...
1. Quantitative Problem: You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta A $300,000 1.3 B 200,000 1.7 C 400,000 0.85 D 100,000 -0.3 Total investment $1,000,000 The market's required return is 9% and the risk-free rate is 3%. What is the portfolio's required return? Round your answer to 3 decimal places. Do not round intermediate calculations.????? 2. Suppose you are the money manager of a $4.78 million investment fund. The fund consists of...
Suppose you are the money manager of a $4.98 million investment fund. The fund consists of...
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...
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 $4.12 million investment fund. The fund consists of...
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 $4.33 million investment fund. The fund consists of...
Suppose you are the money manager of a $4.33 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $   420,000                                 1.50 B 740,000                                 (0.50) C 1,020,000                                 1.25 D 2,150,000                                 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. %
PORTFOLIO REQUIRED RETURN Suppose you are the money manager of a $5.05 million investment fund. The...
PORTFOLIO REQUIRED RETURN Suppose you are the money manager of a $5.05 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $   420,000                                 1.50 B 680,000                                 (0.50) C 1,300,000                                 1.25 D 2,650,000                                 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.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT