Please submit in Excel
1.The Terrapins Investment Fund has a total investment of $500 million in five stocks.
Stock Investment (millions) Beta
1 $150 .6
2 120 1.2
3 80 3.0
4 90 1.8
5 60 1.0
Total $500
What is the fund's overall, or weighted average, beta?
3. Refer to the previous problem. If the risk-free rate is 12% and the market risk premium is 6%, what is the required return on the Terrapins Fund?