Required Rate of Return Suppose rRF = 5%, rM = 9%, and rA = 15%. Calculate...

Required Rate of Return

Suppose r_RF = 5%, r_M = 9%, and r_A = 15%.

Calculate Stock A's beta. Round your answer to two decimal places.
If Stock A's beta were 1.8, then what would be A's new required rate of return? Round your answer to two decimal places.
%

Portfolio Required Return

Suppose you manage a $3.925 million fund that consists of four stocks with the following investments:

Stock	Investment	Beta
A	$320,000	1.50
B	575,000	-0.50
C	980,000	1.25
D	2,050,000	0.75

If the market's required rate of return is 9% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.

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Expert Solution

jeff jeffy answered 1 week ago

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