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? $$\begin{array}{l}
\begin{array} { c c c }
\text { Stock } & \text { Amount } & \text { Beta } \
\text { A } & \$ 1,075,000 & 1.20 \
B & 675,000 & 0.50 \
C & 750,000 & 1.40 \
\text { D } & 500,000 & 0.75
\end{array}\
\quad\quad\quad\quad\underline{\$ 3,000,000}
\end{array}$$
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? $$\begin{array}{l}
\begin{array} { c c c } 
\text { Stock } & \text { Amount } & \text { Beta } \
 \text { A } & \$ 1,075,000 & 1.20 \
B & 675,000 & 0.50 \
C & 750,000 & 1.40 \
\text { D } & 500,000 & 0.75
\end{array}\
\quad\quad\quad\quad\underline{\$ 3,000,000}
\end{array}$$
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? $$\begin{array}{l}
\begin{array} { c c c } 
\text { Stock } & \text { Amount } & \text { Beta } \
 \text { A } & \$ 1,075,000 & 1.20 \
B & 675,000 & 0.50 \
C & 750,000 & 1.40 \
\text { D } & 500,000 & 0.75
\end{array}\
\quad\quad\quad\quad\underline{\$ 3,000,000}
\end{array}$$
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,a