eBook Problem Walk-Through Suppose you are the money manager of a $4.04 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $220,000 1.50 800,000 (0.50) 1,020,000 1.25 2,000,000 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? Do not round intermediate calculations. Round your answer to two decimal places. %

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
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4. Problem 8.07 (Portfolio Required Return)
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Problem Walk-Through
Suppose you are the money manager of a $4.04 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock
Investment
Beta
A
$ 220,000
1.50
B
800,000
(0.50)
1,020,000
1.25
D
2,000,000
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? Do not round intermediate calculations. Round your answer to
two decimal places.
%
Transcribed Image Text:4. Problem 8.07 (Portfolio Required Return) еВook Problem Walk-Through Suppose you are the money manager of a $4.04 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 220,000 1.50 B 800,000 (0.50) 1,020,000 1.25 D 2,000,000 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? Do not round intermediate calculations. Round your answer to two decimal places. %
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