A mutual fund manager has a 40 million portfolio with a


A mutual fund manager has a $40 million portfolio with a beta of 1.00. The risk-free rate is 4.25%, and the market risk premium is 6.00%. The manager expects to receive an additional $60 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%. What must the average beta of the new stocks be to achieve the target required rate of return?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: A mutual fund manager has a 40 million portfolio with a
Reference No:- TGS01368785

Expected delivery within 24 Hours