In: Finance
PORTFOLIO REQUIRED RETURN
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 | $ 400,000 | 1.50 |
B | 560,000 | (0.50) |
C | 1,060,000 | 1.25 |
D | 2,000,000 | 0.75 |
If the market's required rate of return is 9% 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.