Expert Answers

Expert Answers

 

Consider the following information and then calculate the required rate of return for the Scientific Investment Fund, which holds 4 stocks. The market’s required rate of return is 15.0%, the risk-free rate is 7.0%, and the Fund’s assets are as follows:
Stock    Investment     Beta
A          $ 200,000       1.50
B            300,000       -0.50
C            500,000        1.25
D         1,000,000        0.75

a. 10.67%
b. 11.23%
c. 11.82%
d. 12.45%
e. 13.10%