Consider the Following Information and Then Calculate the Required Rate

question 76

Multiple Choice

Consider the following information and then calculate the required rate of return for the Universal 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: $\begin{array}{lrr}\text { Stock }&\text { Investment }&\text { Beta}\\\mathrm{A} & \$ 200,000 & 1.50 \\\mathrm{~B} & \$ 300,000 & -0.50 \\\mathrm{C} & \$ 500,000 & 1.25 \\\mathrm{D} & \$ 1,000,000 & 0.75\end{array}$

• A) 9.58%
• B) 10.09%
• C) 10.62%
• D) 11.18%
• E) 11.77%

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