Problema mutual fund manager has a 20 million portfolio, Ask an Expert

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Problem:

A mutual fund manager has a $20 million portfolio with a beta of 0.75. The risk-free rate is 7.25%, and the market risk premium is 6.0%. 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 13%.

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Question: What should be the average beta of the new stocks added to the portfolio?

Note: Please show guided help with steps and answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170607

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