Business, 12.08.2020 06:01 darrieg

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:(hint: market beta =1.0) Stock Investment Beta A $ 200,000 1.50 B 300,000 −0.50 C 500,000 1.25 D $1,000,000 0.75

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Answer from: Shom2095

11.77%

Explanation:

total investment = $200,000 + $300,000 + $500,000 + $1,000,000 = $2,000,000

stock weight beta total

A $200,000 / $2,000,000 1.5 0.15

B $300,000 / $2,000,000 -0.5 -0.075

C $500,000 / $2,000,000 1.25 0.3125

D $1,000,000 / $2,000,000 0.75 0.375

Portfolio 0.7625

required rate of return = Rf + beta(Rm - Rf) = 7% + 0.7625(13.25% - 7%) = 11.7656% = 11.77%

Answer from: Quest

i just took the test and it is financing

Answer from: Quest

1 all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

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Consider the following information and then calculate the required rate of return for the Global Inv...

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