A mutual fund you considering purchasing has a beta of 1.6.  If the risk free rate is 4%, the market return is 8%, and the r-squared is 0.09.  What return would CAPM predict you should expect from this mutual fund?   Question 18 options:   6.4%   10.4%   12.8%   The data have too low explanatory power to be useful

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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A mutual fund you considering purchasing has a beta of 1.6.  If the risk free rate is 4%, the market return is 8%, and the r-squared is 0.09.  What return would CAPM predict you should expect from this mutual fund?

 

Question 18 options:

 

6.4%

 

10.4%

 

12.8%

 

The data have too low explanatory power to be useful

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