# Required Rate of Return for an Investment Fund

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 13.25%, 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

It could be one of these answers:

a. 9.58%

b. 10.09%

c. 10.62%

d. 11.18%

e. 11.77%

https://brainmass.com/business/finance/required-rate-return-investment-fund-600161

#### Solution Preview

With the attached formula,

First of all, you will get

for A = E(R) = .07 + 1.5(.1325-.07) = 16.37%

for ...

#### Solution Summary

This solution shows step-by-step calculations to determine the required rate of return with different stocks of an investment fund.

$2.19