Assume that you are the portfolio manager of the Maryland Fund, a $6 million mutual fund that contains the following stocks:
Stock Amount Beta
A $2,500,000 0.90
B $1,750,000 1.05
C $1,000,000 1.25
D $750,000 1.30
The required rate of return in the market is 12.2% and the risk-free rate is 5.50%. What rate of return should investors expect (and require) on their investment in this fund?