Joel Foster is 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? $$\begin{array} { c r r }
\text { Stock } & \text { Amount } & \text { Beta } \
\text { A } & \$ 1,075,000 & 1.20 \
\text { B } & 675,000 & 0.50 \
\text { C } & 750,000 & 1.40 \
\text { D } & 500,000 & 0.75 \
& \$ 3,000,000 &
\end{array}$$
A) 10.56%
B) 10.83%
C) 11.11%
D) 11.38%
E) 11.67%

Question

Joel Foster is 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? $$\begin{array} { c r r } 
\text { Stock } & \text { Amount } & \text { Beta } \
\text { A } & \$ 1,075,000 & 1.20 \
\text { B } & 675,000 & 0.50 \
\text { C } & 750,000 & 1.40 \
\text { D } & 500,000 & 0.75 \
& \$ 3,000,000 &
\end{array}$$
A) 10.56%
B) 10.83%
C) 11.11%
D) 11.38%
E) 11.67%

Quizplus · Accepted Answer

The Answer of Joel Foster is 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? $$\begin{array} { c r r } 
\text { Stock } & \text { Amount } & \text { Beta } \
\text { A } & \$ 1,075,000 & 1.20 \
\text { B } & 675,000 & 0.50 \
\text { C } & 750,000 & 1.40 \
\text { D } & 500,000 & 0.75 \
& \$ 3,000,000 &
\end{array}$$
A) 10.56%
B) 10.83%
C) 11.11%
D) 11.38%
E) 11.67%

Joel Foster Is the Portfolio Manager of the SF Fund