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

1                     $6 million                   0.50

2                     $5 million                   0.80

3                     $4 million                   1.00

4                     $3 million                   1.40    

5                     $2 million                   2.00

The risk free rate is 7 percent and the return on the market portfolio is 12 percent

a) What is the portfolio's beta coefficient?

b) What is the fund's required rate of return?

Reference no: EM131833549

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