If the market required rate of return is 14 percent and the


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

Stock: Investment: Beta:

A. $400,000 1.50

B. $600,000 -.50

C. $1,000,000 1.25

D. $2,000,000 0.75

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

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Financial Management: If the market required rate of return is 14 percent and the
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