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    Multiple Choice Question about Required Rate of Return

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    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 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%

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    Solution Summary

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