Suppose you are the money manager of a $3.82 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock | Investment | Beta |
A | $ 300,000 | 1.50 |
B | 680,000 | (0.50) |
C | 940,000 | 1.25 |
D | 1,900,000 | 0.75 |
If the market's required rate of return is 12% 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.
%
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