Suppose you are the money manager of a $4.82 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 460,000 1.50 B 500,000 (0.50) C 1,260,000 1.25 D 2,600,000 0.75  If the market’s required rate of return is 8% and the risk-free rate is 4%, what is the fund’s required rate of return?

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
Problem 10P
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Suppose you are the money manager of a $4.82 million
investment fund. The fund consists of four stocks with the following investments and betas:
Stock Investment Beta
A $ 460,000 1.50
B 500,000 (0.50)
C 1,260,000 1.25
D 2,600,000 0.75
 If the market’s required rate of return is 8% and the risk-free rate is 4%, what is the fund’s
required rate of return?
8-8 BETA COEFFICIENT Given t

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