Hazel Morrison, a Mutual Fund Manager, Has a $40 Million

question 28

Multiple Choice

Hazel Morrison, a mutual fund manager, has a $40 million portfolio with a beta of 1.00.The risk-free rate is 4.25%, and the market risk premium is 6.00%.Hazel expects to receive an additional $60 million, which she plans to invest in additional stocks.After investing the additional funds, she wants the fund's required and expected return to be 13.00%.What must the average beta of the new stocks be to achieve the target required rate of return?

• A) 1.68
• B) 1.76
• C) 1.85
• D) 1.94
• E) 2.04

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Definitions:

Cultural Ally

A person who actively supports and stands in solidarity with another culture, striving to understand and advocate for its needs and values.

Whiteness

A set of cultural practices and norms associated with white people and often linked with positions of power and privilege.

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The process of outlining a strategy or method for addressing a patient's or client's needs, typically in healthcare or therapeutic contexts, based on assessment outcomes.

People of Color

An inclusive term for individuals of non-white racial or ethnic backgrounds.