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In: Finance
A mutual fund manager has a $20 million portfolio with a beta of 1.7. The risk-free...
A mutual fund manager has a $20 million portfolio with a beta of 1.7. The risk-free rate is 3.5%, and the market risk premium is 5%. The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund's required return to be 11%. What should be the average beta of the new stocks added to the portfolio? Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to one decimal place.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
A mutual fund manager has a $20 million portfolio with a beta of 1.7. The risk-free...
A mutual fund manager has a $20 million portfolio with a beta of
1.7. The risk-free rate is 3.5%, and the market risk premium is 7%.
The manager expects to receive an additional $5 million, which she
plans to invest in a number of stocks. After investing the
additional funds, she wants the fund's required return to be 14%.
What should be the average beta of the new stocks added to the
portfolio? Negative value, if any, should be indicated...
A mutual fund manager has a $20 million portfolio with a beta of 2.7. The risk-free...
A mutual fund manager has a $20 million portfolio with a beta of
2.7. The risk-free rate is 2.5%, and the market risk premium is 9%.
The manager expects to receive an additional $5 million, which she
plans to invest in a number of stocks. After investing the
additional funds, she wants the fund's required return to be 25%.
What should be the average beta of the new stocks added to the
portfolio? Negative value, if any, should be indicated...
A mutual fund manager has a $20 million portfolio with a beta of 2.8. The risk-free...
A mutual fund manager has a $20 million portfolio with a beta of
2.8. The risk-free rate is 4.5%, and the market risk premium is 7%.
The manager expects to receive an additional $5 million, which she
plans to invest in a number of stocks. After investing the
additional funds, she wants the fund's required return to be 22%.
What should be the average beta of the new stocks added to the
portfolio? Negative value, if any, should be indicated...
A mutual fund manager has a $20 million portfolio with a beta of 2.00. The risk-free...
A mutual fund manager has a $20 million portfolio with a beta of
2.00. The risk-free rate is 8.00%, and the market risk premium is
4.0%. The manager expects to receive an additional $5 million,
which she plans to invest in a number of stocks. After investing
the additional funds, she wants the fund's required return to be
18%. What should be the average beta of the new stocks added to the
portfolio? Negative value, if any, should be indicated...
A mutual fund manager has a $20 million portfolio with a beta of 2.8. The risk-free...
A mutual fund manager has a $20 million portfolio with a beta of
2.8. The risk-free rate is 5.5%, and the market risk premium is 7%.
The manager expects to receive an additional $5 million, which she
plans to invest in a number of stocks. After investing the
additional funds, she wants the fund's required return to be 23%.
What should be the average beta of the new stocks added to the
portfolio? Negative value, if any, should be indicated...
A mutual fund manager has a $40 million portfolio with a beta of 1.00. The risk-free...
A mutual fund manager has a $40 million portfolio with a beta of
1.00. The risk-free rate is 4.25%, and the market risk premium is
6.00%. The manager expects to receive an additional $60 million
which she plans to invest in additional stocks. After investing the
additional funds, she wants the combined fund’s required return to
be 13.00%. What must the average beta of the new stocks be to
achieve the required rate of return of 13%?
A mutual fund manager has a $40.00 million portfolio with a beta of 1.00. The risk-free...
A mutual fund manager has a $40.00 million portfolio with a beta
of 1.00. The risk-free rate is 4.25%, and the market risk premium
is 6.00%. The manager expects to receive an additional $29.50
million which she plans to invest in additional stocks. After
investing the additional funds, she wants the fund's required and
expected return to be 13.00%. What must the average beta of the new
stocks be to achieve the target required rate of return? Do not
round...
A mutual fund manager has a $40.00 million portfolio with a beta of 1.00. The risk-free...
A mutual fund manager has a $40.00 million portfolio with a beta
of 1.00. The risk-free rate is 4.25%, and the market risk premium
is 6.00%. The manager expects to receive an additional $29.50
million which she plans to invest in additional stocks. After
investing the additional funds, she wants the fund's required and
expected return to be 13.00%. What must the average beta of the new
stocks be to achieve the target required rate of return? Do not
round...
PORTFOLIO BETA A mutual fund manager has a $20 million portfolio with a beta of 1.50....
PORTFOLIO BETA
A mutual fund manager has a $20 million portfolio with a beta of
1.50. The risk-free rate is 6.00%, and the market risk premium is
5.0%. The manager expects to receive an additional $5 million,
which she plans to invest in a number of stocks. After investing
the additional funds, she wants the fund's required return to be
12%. What should be the average beta of the new stocks added to the
portfolio? Do not round intermediate calculations....
Ted, a mutual fund manager, has a $40 million portfolio with a beta of 1.00. The...
Ted, a mutual fund manager, has a $40 million portfolio with a
beta of 1.00. The risk-free rate is 4.25%, and the market risk
premium is 7.00%. Ted expects to receive an additional $60 million,
which she plans to invest in additional stocks. After investing the
additional funds, she wants the fund's required and expected return
to be 13.00%. What must the average beta of the new stocks be to
achieve the target required rate of return?
*Show the formula...
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