Question

.Suppose you are the money manager of a $4.9 million investment fund. The fund consists of four stocks with the following investments and betas:

Stock	Investment	Beta
A	$   480,000	1.50
B	700,000	(0.50)
C	1,220,000	1.25
D	2,500,000	0.75

If the market's required rate of return is 9% and the risk-free rate is 3%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.

Answer 1

Based on the given data, pls find below steps, workings and answer:

Based on the given portfolio allocation, have found Beta of the portfolio = 0.77

and the Fund's required rate of Return = 7.62%