Suppose you are the money manager of a $5.31 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock | Investment | Beta |
A | $ 480,000 | 1.50 |
B | 760,000 | (0.50) |
C | 1,220,000 | 1.25 |
D | 2,850,000 | 0.75 |
If the market's required rate of return is 9% 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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