Consider the Following Information, and Then Calculate the Required Rate

question 59

Short Answer

Consider the following information, and then calculate the required rate of return for the Scientific Investment Fund. The total investment in the fund is $2 million.The market required rate of return is 15 percent, and the risk-free rate is 7 percent.
$\begin{array}{llcc} \text {Stock } & \text { Investment } & \text { Beta } \\\text { A } &\$ 200,000 & 1.50\\ \text { B } & 300,000&-0.50\\\text { C } & 500,000 & 1.25\\\text { D } & 1,000,000 & 0.75\\\end{array}$

a. $14.3 \%$
b. $15.0 \%$
c. $13.1 \%$
d. $12.7 \%$
e. $10.3 \%$

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Definitions:

Systems Software

The class of computer instructions that serve primarily as an intermediary between computer hardware and application programs; provides important self-regulatory functions for computer systems.

Price

The amount of money expected, required, or given in payment for something.

Hardware

The physical components of a computer system, such as the CPU, memory devices, and input/output devices.

Software

A set of computer programs that enable the hardware to process data.