Question
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 2 years 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...
A mutual fund manager has a $90.0 million portfolio with a beta of 1.25. The risk-free...
A mutual fund manager has a $90.0 million portfolio with a beta
of 1.25. The risk-free rate is 3.50%, and the market risk premium
is 6.00%. The manager expects to receive an additional $30.0
million which she plans to invest in a number of stocks. After
investing the additional funds, she wants to reduce the portfolio’s
risk level so that once the additional funds are invested the
portfolio’s required return will be 11.75%. What must the average
beta of the...
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....
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- A pension fund manager is considering three mutual funds. The first is a stock fund, the...
- Compute the cost of not taking the following cash discounts. (Use a 360-day year. Do not...
- During his project presentation, Bob falls sick and performs poorly. However, his colleague, Dan, concludes that...
- A sample human input file that contains test values that a human would enter on the...
- A solution is prepared by dissolving 15 ml of methanol in 150.0 ml water at 25...
- Consider a newlywed who is planning a wedding anniversary gift of a trip to Canada for...
- We are evaluating a project that costs $868,000, has a life of eight years, and has...
ADVERTISEMENT