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assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The req

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Answer #1

Portfolio beta=Respective beta*Respective investment weight

=(525,000/3,000,000*1.2)+(675,000/3,000,000*0.5)+(1,300,000/3,000,000*1.4)+(500,000/3,000,000*0.75)

=1.054167(Approx).

required return=risk-free rate +Beta*(market rate- risk-free rate)

=2+(11-2)*1.054167

=11.49%(Approx).

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