a mutual fund manager expects her portfolio to earn a rate of return of 11 percent this year. The beta of her portfolio is .8. If the rate of return available on risk-free assets is 49% and you expect the rate of retum on the market portfolio to be 14%, should you invest in this mutual fund?

a mutual fund manager expects her portfolio to earn a rate of return of 11 percent this year. The beta of her portfolio is .8. If the rate of return available on risk-free assets is 49% and you expect the rate of retum on the market portfolio to be 14%, should you invest in this mutual fund?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 4P

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a mutual fund manager expects her portfolio to eam a rate of return of 11 percent this year. The beta of her portfolio is .8. If the
rate of return available on risk-free assets is 4% and you expect the rate of retum on the market portfolio to be 14%, should you
invest in this mutual fund?

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