Sinclair fund has invested in securities of five


Sinclair Fund has invested in securities of five corporations. The market value of each of the investments and the beta of the corporations is as follows:

Stock Investment Beta

3

  1. 1 $6 million
  2. 2 $5 million
  3. 3 $4 million
  4. 4 $3 million
  5. 5 $2 million

0.50 0.80 1.00 1.40 2.00

The risk free rate is 7 percent and

a) What is the portfolio's beta coefficient? (5 marks) b) What is the fund's required rate of return?

Solution Preview :

Prepared by a verified Expert
Finance Basics: Sinclair fund has invested in securities of five
Reference No:- TGS02629051

Now Priced at $10 (50% Discount)

Recommended (99%)

Rated (4.3/5)