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