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Multiple Choice Question about Required Rate of Return

Consider the following information and then calculate the required rate of return for the Scientific Investment Fund, which holds 4 stocks. The market's required rate of return is 15.0%, the risk-free rate is 7.0%, and the Fund's assets are as follows:
Stock

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

a. 10.67%

b. 11.23%

c. 11.82%

d. 12.45%

e. 13.10%

Solution Summary

Solution shows how to estimate the required rate of return with calculations displayed clearly.

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