Question: Assume you are the money manager of a 4 million dollar investment fund. The fund consists of four stocks with the following investments & 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 required rate of return is 14% and the risk-free rate is 6%, calculate the fund's required rate of return?