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    Finding required rate of return on the given fund

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    Consider the following information and then calculate the required rate of return for the Global Investment Fund, which holds 4 stocks. The market's required rate of return is 16.25%, the risk-free rate is 7.00%, and the Fund's assets are as follows:

    Stock Investment Beta
    A $200,000 1.50
    B $300,000 -0.50
    C $500,000 1.25
    D $1,000,000 0.75

    15.88%
    15.18%
    10.68%
    14.05%
    16.44%

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    https://brainmass.com/business/beta-and-required-return-of-a-project/finding-required-rate-return-given-fund-307745

    Solution Preview

    WA=weight of stock A=200000/(200000+300000+500000+1000000)= 0.100
    WB=weight of stock B=300000/(200000+300000+500000+1000000)= 0.150
    WC=weight of ...

    Solution Summary

    Solution provides step by step method to find out the required rate of return on the given fund.

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