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Septeos Septeos
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8 months ago
A mutual fund manager has a $26 million portfolio with a beta of 1.1. The risk-free rate is 5.3%, and the market risk premium is 7%. The manager expects to receive an additional $29 million, which they plan to invest in additional stocks. After investing the additional funds, they want the fund’s required and expected return to be 16%. What must the average beta of the new stocks be to achieve the target required rate of return?


▸

1.65



▸

1.72



▸

1.80



▸

1.91

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
Authors:
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JehanzaibJehanzaib
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8 months ago
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Septeos Author
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8 months ago
Good timing, thanks!
dedricgard
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Yesterday
Helped a lot
husne
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2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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