Business, 25.03.2020 06:44 iamthepantaloon8357
Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00% and the risk-free rate is 5.00%. What rate of return should investors expect (and require) on this fund? Stock Amount Beta A $1,075,000 1.20 B 675,000 0.50 C 750,000 1.40 D 500,000 0.75 Total $3,000,000 10.56% 10.83% 11.11% 11.38% 11.67%
Answers: 1
is risk-free return rate (5% = 0.05)
is the market rate of return (11% = 0.11)
, we take the weighted average of the portfolio.
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Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the...
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