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What must the average beta of the new stocks be to achieve

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Problem 1: A mutual fund manager, has a $50 million portfolio with a beta of 2. The risk-free rate is 4%, and the market risk premium is 6.00%. She expects to receive an additional $50 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 16.00%. What must the average beta of the new stocks be to achieve the target required rate of return?

Reference no: EM132730750

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