Calculating the fund's beta and required rate of return

Alcoa's Inc.'s Pension Fund holds 4 stocks. The market's required rate of return is 6% and the risk free rate is 2%.

Stock Investment Beta
A $300,000 1.75
B $500,000 -0.75
C $1,000,000 1.05
D $500,000 0.75

a. What is this fund's beta?
b. Calculate the required rate of return.

Solution Preview

a. What is this fund's beta?
Investment in stock A=Ia=300,000
Beta of stock A=ba=1.75
Investment in stock B=Ib=500,000
Beta of stock B=bb=-0.75
Investment in stock C=Ic=1,000,000
Beta of stock ...

Solution Summary

Solution describes the steps to calculate the beta and required rate of return for the given fund.

Suppose you are the money manager of a 4 million investment fund. The fund consists of 4 stocks with the following investments andbetas.
Stock A 400,000 beta 1.50
Stock B 60,000 beta (0.50)
Stock C 1,000,000 beta 1.25
Stock D 2,000,000 beta 0.75
If the market requiredrate of return is 14% and t

An investment fund has total capital of $500 million invested in 5 stocks:
STOCK INVESTMENT STOCK'S BETA COEFFICIENT
A $60 million 0.5
B $120 million 2.0
C $80 million 4.0
D $80 million 1.0
E $60 million 3.0
Thebeta coefficient for the fund can be found as a we

Consider the following information andthen calculate therequiredrate of return for the Scientific Investment Fund, which holds 4 stocks. The market's requiredrate of return is 15.0%, the risk-free rate is 7.0%, andtheFund's assets are as follows:
Stock
Stock Investment Beta
A

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A stock has a requiredreturn of 11%; the risk-free rate is 7%; andthe market risk premium is 4%.
a. What is the stock's beta?
b. If the market risk premium increased to 6%, what would happen to the stock's requiredrate of return? Assume the risk-free rateandthebeta remain unchanged.

See attached file.
8- 1 EXPECTED RETURN
A stock's returns have the following distribution:
Calculate the stock's expected return, standard deviation, and coefficient of variation.
8- 3 REQUIREDRATE OF RETURN
Assume that the risk- free rate is 6% andthe expected return on the market is 13%. What is therequired

Look at attached document.
8-1 EXPECTED RETURN A stock's returns have the following distribution:
Calculate the stock's expected return, standard deviation, and coefficient of variation.
8-3 REQUIREDRATE OF RETURN Assume that the risk-free rate is 6% andthe expected return on the market is 13%. What is the requ

Problem: Suppose you are the money manager of a $4 million investment fund. The fund consists of four stocks with the following betas:
Stock Investment Beta
A $0.4 million 1.5
B $0.6 million (0.50)
C $1.0 million 1.25
D $2.0 million 0.75
If the market requiredrate of return is 14 percent andthe risk-

Please help with the following problem.
I have a 4 million dollar investment fund it consists of 4 stocks
stock investment beta
a 400000 1.50
b 600000 -0.50
c 1000000