Calculate the Required Rate of Return for the Wagner Assets

question 16

Multiple Choice

Calculate the required rate of return for the Wagner Assets Management Group,which holds 4 stocks.The market's required rate of return is 15.0%,the risk-free rate is 7.0%,and the Fund's assets are as follows: $$\begin{array} { c c c } \text { Stack } & \text { Investment } &\text { Beta } \\\text { A } & \$ & 1.50\\\text { } & 200,000 & \\\text { B } & & - 0.50 \\\text { } & 300,000 & \\\text { C } & &1.25 \\\text { } & 500,000 & \\\text { D } & 1,000,000 & 0.75& \\\end{array}$$

• A) 10.67%
• B) 11.23%
• C) 11.82%
• D) 12.45%
• E) 13.10%

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Definitions:

Capacity Analysis

The evaluation of a system's potential to produce goods or complete tasks within a certain period, considering limitations in production.

Time-Driven Activity-Based Costing

A costing method that assigns costs to products based on the actual time resources are used in the production, improving accuracy in cost allocation.

Customer Service Department

A division of a company responsible for handling interactions and inquiries from customers.

Capacity Analysis

An assessment process to determine the maximum level of output or production that a facility can sustain with the existing resources.