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Problem: Suppose you are the money manager of a $4 million investment fund. The fund consists of four stocks with the following betas:

Stock Investment Beta

A $0.4 million 1.5

B $0.6 million (0.50)

C $1.0 million 1.25

D $2.0 million 0.75

If the market required rate of return is 14 percent and the risk-free rate is 6%, what is the funds required return?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M946350

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