In: Finance
I'm confused about this one....
Portfolio Required Return
Suppose you manage a $4.6 million fund that consists of four stocks with the following investments:
Stock | Investment | Beta | |
A | $500,000 | 1.50 | |
B | 350,000 | -0.50 | |
C | 900,000 | 1.25 | |
D | 2,850,000 | 0.75 |
If the market's required rate of return is 9% and the risk-free rate is 4%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.