Assume you are the manager of a 4 million Birr fund that is invested in the following four stocks:
Stock
A
B
C
D
Investment
Birr400,000
Birr600,000
Birr1,000,000
Birr2,000,000
Beta
1.5
-0.5
1.25
0.75
Assuming the risk-free rate is 6% and the market required rate of return is 14%:
a.
What is the required rate of return for the fund? b. What is the beta of the fund?



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