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EXPECTED AND REQUIRED RATES OF RETURN Assume that the risk-free rate is 3% and the...

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EXPECTED AND REQUIRED RATES OF RETURN Assume that the risk-free rate is 3% and the market risk premium is 5%. a. What is the required return for the overall stock market? Round your answer to two decimal places. % b. What is the required rate of return on a stock with a beta of 0.42 Round your answer to two decimal places. % PORTFOLIO REQUIRED RETURN Suppose you are the money manager of a $4.85 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 320,000 1.50 B 340,000 (0.50) 1,340,000 1.25 D 2,850,000 0.75 If the market's required rate of return is 13% and the risk-free rate is 3%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. %

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