What is the fund required rate of return

Assignment Help Business Management
Reference no: EM131455813

David is the money manager of a R4,000,000 investment fund.  The fund consists of four shares with the following investments and betas:

Share

Share

Investment

Beta

A

R400,000

1,50

B

R600,000

-0,50

C

R1,000,000

1,25

D

R2,000,000

0,75

If the market required rate of return is 14% and the risk-free rate is 6%, what is the fund's required rate of return?

1. 6%

2. 8%

3. 12%

4. 14%

Please provide the answer and calculation, thanks so much.

Reference no: EM131455813

Questions Cloud

Find probability of proportion as the sample size increased : Assume that the population proportion is .55. Compute the standard error of the proportion. sp. for sample sizes of 100. 200. 500. and 1000.
What is the new market value : Suppose interest rates rise and pulls the preferred stock yield up to 9% What is the new market value?
Importance of continuous monitoring of information systems : Explain The importance of continuous monitoring of information systems. The technical and managerial challenges of continuous monitoring.
Deposit is made on the day you depart : If your first deposit is made 1 year from today and the final deposit is made on the day you depart? Please Show calculations
What is the fund required rate of return : If the market required rate of return is 14% and the risk-free rate is 6%, what is the fund's required rate of return?
What is the advantage of a larger sample size : The population proportion is .30. What is the probability that a sample proportion will be within ±.04 of the population proportion for each of the following.
Reflective writing proforma : Use the sociological imagination (SI) template to reflect on your feelings, thoughts and behaviours in response to knowledge, experiences
Find the probability of sample proportion : Roper ASW conducted a survey to learn about American adults' attitudes toward money and happiness (Money October 2003).
Can you choose a information system security domain : Can you choose a particular information system security domain of your organization or industry and apply what you learned from case readings and SLP examples?

Reviews

Write a Review

Business Management Questions & Answers

  The process of developing and maintaining a crucial fit

The process of developing and maintaining a crucial fit

  What price policy should your firm use

What price policy should your firm use? Are there any legal implications of this choice? Will there be differences in on-line versus off-line pricing policies?

  Contingency leadership theory

1. Do you believe that managers today are using more boss- or more subordinate-centered leadership styles? Explain! 2. Do you agree that time is an important situational factor to consider in selecting a leadership style for a situation? Explain! 3..

  Describe the concept of skill mix

Describe the concept of skill mix and why it is important. Develop a scenario that requires the use of skill mix and explain how the actions you chose accomplish skill mix.

  Write a personal statement about two pages long

Refer to the job opening you identified in SLP 1. Using the job description, write a personal statement (about 2 pages long).

  Fixed costs of plant and equipment

Our text tells us that the location of a facility is usually related to its capacity. Both fixed costs of plant and equipment and the transportation cost of moving goods play key roles in location decisions.

  Find the profit maximizing a two part tariff for verizon

Find the profit maximizing a two-part tariff for Verizon. How much does the best two-part tariff increase the profit over the profit maximizing the single price?

  Problem regarding the steady state probabilities

One half of a country's population lives in the city and one half in the suburbs. There is an80% chance that a suburban resident will remain in the suburbs and a 20% chance that he orshe will move to the city within the next month. A city dweller ..

  Depreciation related to the equipment

Greengage Ltd is considering to buy a main equipment to increase the company's production capacity. The equipment is expected to have a four year useful life. The capital outlay and annual net income after depreciation related to the equipment are..

  Organizations have integrated corporate goals into

organizations have integrated corporate goals into performance appraisal processexplain how organizations have

  What will be the percentage return on investment

What will be the percentage return on your investment if you bought the stock on margin as well as the margin requirement was a. 25 percent

  Group performance in countries with high collectivism

1. Is servant leadership something which is inherent to specific individuals or can it be a learned behavior? If so, how would you think Servant leadership could be taught? 2. Consider the following statement: Group performance in countries with h..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd