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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
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Ans 12.10%

You are managing a $4MM investment fund of 4 stocks. If the market’s required rate of return is 14% and RRF is 6%, the fund’s required rate of return is 12.10%

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