Problem Walk-Through
Suppose you are the money manager of a $4.49 million investment fund. The fund consists of four stocks with the following investments and betas:
Stock | Investment | Beta |
A | $ 360,000 | 1.50 |
B | 300,000 | (0.50) |
C | 1,380,000 | 1.25 |
D | 2,450,000 | 0.75 |
If the market's required rate of return is 8% and the risk-free rate is 7%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
Portfolio beta=Respective beta*Respective investment weight
=(360,000/4,490,000*1.5)+(300,000/4,490,000*-0.5)+(1,380,000/4,490,000*1.25)+(2,450,000/4,490,000*0.75)
=0.880289532
required return= risk-free rate +Beta*(market rate- risk-free rate )
=7+0.880289532*(8-7)
=7.88%(Approx).
eBook Problem Walk-Through Suppose you are the money manager of a $4.49 million investment fund. The...
eBook Problem Walk-Through Suppose you are the money manager of a $3.62 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta $ 360,000 1.50 B 600,000 (0.50 ) 960,000 1.25 1,700,000 0.75 If the market's required rate of return is 11% 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 deci
eBook Problem Walk-Through Suppose you are the money manager of a $4.84 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta $ 220,000 1.50 600,000 (0.50) 1,320,000 1.25 2,700,000 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? Do not round intermediate calculations. Round your answer to two decimal places.
O eBook Problem Walk-Through Suppose you are the money manager of a $3.94 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 320,000 1.50 600,000 (0.50 ) 1,120,000 1,900,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places ReadSpea 10.57 % 1.25...
Suppose you are the money manager of a $4.31 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 360,000 1.50 B 520,000 (0.50) C 1,380,000 1.25 D 2,050,000 0.75 If the market's required rate of return is 9% and the risk-free rate is 7%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
Problem 8-7 Portfolio required return Suppose you are the money manager of a $4.51 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta $ 300,000 1.50 740,000 - 0.50 1,020,000 1.25 2,450,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
Suppose you are the money manager of a $4.71 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 480,000 1.50 B 600,000 (0.50) C 1,380,000 1.25 D 2,250,000 0.75 If the market's required rate of return is 10% and the risk-free rate is 5%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
Suppose you are the money manager of a $4.06 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 380,000 1.50 B 600,000 (0.50 ) C 1,380,000 1.25 D 1,700,000 0.75 If the market's required rate of return is 11% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
Suppose you are the money manager of a $4.62 million investment fund. The fund consists of four stocks with the following investments and betas: Problem Walk-Through еВook Suppose you are the money manager of a $4.62 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta 560,000 A 1.50 400,000 (0.50) В 1,560,000 C 1.25 2,100,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 3%,...
Suppose you are the money manager of a $5.18 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 360,000 1.50 B 600,000 (0.50) C 1,420,000 1.25 D 2,800,000 0.75 If the market's required rate of return is 12% and the risk-free rate is 3%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
Suppose you are the money manager of a $4.02 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 460,000 1.50 B 300,000 (0.50 ) C 1,560,000 1.25 D 1,700,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 5%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.