Question
In: Finance
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 by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places.
Solutions
Expert Solution
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
jeff jeffy answered 1 year agoRelated Solutions
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 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 2.8. 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 2.8. 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 $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...
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...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- ABC Inc. is evaluating a project that will increase annual sales by $230,000 and annual cash...
- Identify the behavior, values, and consumption patterns from people in New York City versus Milan Italy.
- A stock has a required return of 10%, the risk-free rate is 4.5%, and the market...
- How do the media options available to advertisers vary in different parts of the world? (Choose...
- Charming Paper Company sells to the 12 accounts listed here. Account Receivable Balance Outstanding Average...
- Computer Networks IT 210 Please Use your own words . sorry No handwriting no copy paste...
- I would like to integrate a bubble sort into this binary search in c ++ Thank...
ADVERTISEMENT