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Portfolio required return Suppose you are the money manager of a $4 million investment fund. The fund consists of 4 stocks with the following investments and betas:

Stock Investment Beta

A $ 400,000 1.50
B 600,000 (0.50)
C 1,000,000 1.25
D 2,000,000 0.75

If the market's required rate of return is 14 percent and the risk-free rate is 6 percent, what is the fund's required rate of return?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M992499

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