Question
In: Finance
Joel Foster is the portfolio manager of the SF Fund, a $3 million hedge fund that...
Joel Foster is the portfolio manager of the SF Fund, a $3 million hedge fund that
contains the following stocks. The required rate of return on the market is 11.00% and
the risk-free rate is 5.00%.
What rate of return should investors expect (and require) on
this fund?
*****Please show work on EXCEL spreadsheet, please show EXCEL formulas****please do not answer unless you use excel
| STOCK | AMOUNT | BETA |
| A | $1,075,000 | 1.20 |
| B | 675,000 | 0.50 |
| C | 750,000 | 1.40 |
| D | 500,000 | 0.75 |
| $3,000,000 |
Solutions
Expert Solution
Answer - An investor should expect ( and require) 11.105% return
Reason -
You can see the formulas in function box as I have applied them, and other places where, simple multiplication has been done I have specified it at the top of the column. Moreover CAPM formula I have given in detail.
jeff jeffy answered 3 months agoRelated Solutions
Joel Foster is the portfolio manager of the Go Anywhere Fund, a $3 million hedge fund...
Joel Foster is the portfolio manager of the Go Anywhere Fund, a
$3 million hedge fund that contains the following stocks. The
required rate of return on the market is 8.75% and the risk-free
rate is 2.50%. What rate of return should investors expect (and
require) on this fund? Enter your answer rounded to two decimal
places. Do not enter % in the answer box. For example, if your
answer is 0.12345 or 12.345% then enter as 12.35 in the...
Joel Foster is the portfolio manager of the Go Anywhere Fund, a $3 million hedge fund...
Joel Foster is the portfolio manager of the Go Anywhere Fund, a
$3 million hedge fund that contains the following stocks. The
required rate of return on the market is 8.75% and the risk-free
rate is 2.50%. What rate of return should investors expect (and
require) on this fund?
Stock
Amount
Beta
A
$1,075,000
1.20
B
675,000
1.50
C
750,000
3.35
D
500,000
1.10
$3,000,000
Kaiser is the portfolio manager of the SF Fund, a $3 million hedge fund that contains...
Kaiser is the portfolio manager of the SF Fund, a $3 million
hedge fund that contains the following stocks. The required rate of
return on the market is 11.00% and the risk-free rate is 5.00%.
What rate of return should investors expect (and require) on this
fund?
Stock
Amount
Beta
A
$1,075,000
1.20
B
675,000
0.50
C
750,000
1.40
D
500,000
0.75
$3,000,000
*Show your formulas and formula inputs.
Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund...
Assume that you are the portfolio manager of the SF Fund, a $3
million hedge fund that contains the following stocks. The required
rate of return on the market is 11.00% and the risk-free rate is
5.00%.
Stock
Amount
Beta
A
$1,075,000
1.20
B
675,000
0.50
C
750,000
1.40
D
500,000
0.75
$3,000,000
Based on the CAPM wat rate of return should investors require on
this fund?
1. Assume that you are the portfolio manager of the SF Fund, a $3 million hedge...
1. Assume that you are the portfolio manager of the SF Fund, a
$3 million hedge fund that contains the following stocks. The
required rate of return on the market is 12.00% and the risk-free
rate is 4.00%. What rate of return should investors expect (and
require) on this fund?
Stock Amount Beta
A $1,075,000 1.20
B 675,000 0.50
C 750,000 1.40
D 500,000 0.75
Total $3,000,000
A.10.56%
B.10.83%
C.11.11%
D.11.38%
E.12.14%
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