Question: Portfolio Required Return
Suppose you manage a $3.445 million fund that consists of four stocks with the following investments:
| Stock |
Investment |
Beta |
| A |
$200,000 |
|
1.50 |
| B |
475,000 |
|
-0.50 |
| C |
1,020,000 |
|
1.25 |
| D |
1,750,000 |
|
0.75 |
If the market's required rate of return is 10% and the risk-free rate is 4%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.