Problem: Alcoa's Inc.'s Pension Fund holds 4 stocks. The market's required rate of return is 6% and the risk free rate is 2%.
Stock Investment Beta
A $300,000 1.75
B $500,000 -0.75
C $1,000,000 1.05
D $500,000 0.75
Q1. What is this fund's beta?
Q2. Calculate the required rate of return.