What is the fund required rate of return

Assignment Help Financial Management
Reference no: EM131609616

Portfolio required return Suppose you are the money manager of a $3.56 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 280,000 1.50 B 380,000 - 0.50 C 1,100,000 1.25 D 1,800,000 0.75 If the market's required rate of return is 11% and the risk-free rate is 3%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.

 

Reference no: EM131609616

Questions Cloud

Replacement of the theater lighting system : Toronto Shakespearean Theater’s board of directors is considering the replacement of the theater’s lighting system.
Determine marginal cost of first three years of operating : determine marginal cost of first 3 years of operating the machine. What replacement analysis method would be used if minimum EUAC of challenger was known?
What must be the risk-free rate : Assume that both portfolios A and B are well diversified, that E(rA) = 17%, what must be the risk-free rate?
CAPM and portfolio return : what will be the required return on your $5.5 million portfolio?
What is the fund required rate of return : Suppose you are the money manager of a $3.56 million investment fund. what is the fund's required rate of return?
The intermediary in an interest rate swap transaction : Explain the role of the Intermediary in an Interest Rate Swap transaction?
What is the market risk premium : What is the market risk premium (rM - rRF)? What is the required return of Fund P?
Planning for the international marketplace : What are the key drivers that today’s marketer has to understand in planning for the international marketplace?
Calculate investments and debt per share : calculate investments and debt per share and apply those to determine a final stock price valuation.

Reviews

Write a Review

Financial Management Questions & Answers

  Employer is reviewing the acquisition of new machine

Your employer is reviewing the acquisition of a new machine. Should it make the investment and why or why not?

  Affected by the inventory reporting methods used

Net income results, reported in the financial statement presentation, can be affected by the inventory reporting methods used.

  Compute the expected spot rate next year

Use the parity conditions of international finance to compute the expected spot rate next year,- U.S. risk-free rate.

  Why does the firms market value differ from its book value

Why does the firm’s market value differ from its book value? Do you know how to use the Internet to look up financial information on a company? See if you can find market value and book value for Apple.

  What is its self-supporting growth rate

Sales Increase Maggie's Muffins, Inc., generated $4,000,000 in sales during 2013, and its year-end total assets were $2,800,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of account..

  Manufactures replicators-starfleets journal entries

Starfleet Corporation manufactures replicators. Prepare Starfleet's (lessor) January 1, 2018 journal entries.

  What is the reward-to-volatility ratio for the equity fund

You manage an equity fund with an expected risk premium of 11% and a standard deviation of 24%. The rate on Treasury bills is 6.2%. Your client chooses to invest $80,000 of her portfolio in your equity fund and $20,000 in a T-bill money market fund. ..

  Two investment options-annual coupon payment-municipal bond

Suppose you have two investment options: a corporate bond with a 7% annual coupon payment or a municipal bond with a 6% annual coupon payment.

  Assume these savings will continue forever at this level

For planning purposes you assume these savings will continue forever at this level.

  Expected return and standard deviation of a portfolio

Suppose that a fund that tracks the S&P has mean E(RM) = 16% and standard deviation ?M = 10%, and suppose that the T-bill rate Rf = 8%. What is the expected return and standard deviation of a portfolio that has 50% of its wealth in the risk-free asse..

  Value of bond based on market price of the common stock

Given the following information concerning a convertible bond: What is the current yield of this bond? What is the value of the bond based on the market price of the common stock? What is the value of the common stock based on the market price of the..

  Comment on equity of income versus a consumption tax

Suppose two workers earn labor incomes of $20,000 per year in each of three years. One worker saves 20 percent of her labor earnings in each of the first two periods, and spends all her savings and accumulated interest in the final period. Calculate ..

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