7. Given the following information, determine the beta coefficient for Stock G that is consistent
with equilibrium: expected return for Stock G = 9.5%; risk-free rate of return = 3.5%; required
return for the market = 9%.
8. Consider the following information for the Alachua Retirement Fund, with a total investment
of $4 million. The market required rate of return is 12%, and the risk-free rate is 6%. What is its
required rate of return?
Stock Investment Beta
A $ 500,000 1.2
B 500,000 -0.4
C 1,000,000 1.5
D 2,000,000 0.8
Total $4,000,000