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