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
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.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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:
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6.4% |
|
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10.4% |
|
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12.8% |
|
|
The data have too low explanatory power to be useful |
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