Suppose you are the money manager of a $4.4 million investment fund. The fund consists of four stocks with the following investments and betas:StockInvestmentBetaA$ 480,000 1.50B520,000 (0.50)C1,500,000 1.25D1,900,000 0.75If 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.

A portfolio is a group of different securities held together with the objective of maximizing higher…

Answered: Suppose you are the money manager of a…

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 $4.4 million investment fund. The fund consists of four stocks with the following investments and betas:

Stock	Investment	Beta
A	$ 480,000	1.50
B	520,000	(0.50)
C	1,500,000	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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