Suppose you are the money manager of a $4 million investment fund. - 44195

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Suppose you are the money manager of a $4 million investment fund. The fund consists of 4 stocks with the following investments and betas:

Stock                           Investment                 Beta    

    A                             $400,000                     1.50

    B                               600,000                     (.50)

    C                             1,000,000                    1.25

    D                             2,000,000                    0.75

 

If the market’s required rate of return is 14% and the risk-free rate is 6%, what is the funds required rate of return?


Market rate of return (***** 100% Correct Solution *****)

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Market ra

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