If the markets required rate of return is 10 and the


PORTFOLIO REQUIRED RETURN

Suppose you are the money manager of a $3.97 million investment fund. The fund consists of four stocks with the following investments and betas:

Stock Investment Beta

A $ 340,000 1.50

B 740,000 (0.50)

C 940,000 1.25

D 1,950,000 0.75

If the market's required rate of return is 10% and the risk-free rate is 3%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.

_____%

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Financial Management: If the markets required rate of return is 10 and the
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