Problemhazel morrison a mutual fund manager has a 60, Ask an Expert

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Problem:

Hazel Morrison, a mutual fund manager, has a $60 million portfolio with a beta of 1.00. The risk free rate is 3.25%, and the market risk premium is 6.00%. Hazel expects to receive an additional $40 million, which she plans to invest in additional stocks. After investing the additional funds, she wants the fund's required and expected return to be 13.00%.

Required:

Question: What must the average beta of the new stocks be to achieve the target required rate of return? Please provide all calculation and formulas.

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Category:- Basic Finance
Reference No.:- M91146314

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