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Invested in securities of five corporations

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Sinclair Fund has invested in securities of five corporations. The market value of each of the investments and the beta of the corporations is as follows:

Stock Investment Beta

3

  1. 1 $6 million
  2. 2 $5 million
  3. 3 $4 million
  4. 4 $3 million
  5. 5 $2 million

0.50 0.80 1.00 1.40 2.00

The risk free rate is 7 percent and

a) What is the portfolio's beta coefficient? (5 marks) b) What is the fund's required rate of return?

Reference no: EM131833546

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