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
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*Show the formula...
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