QUESTION 16 There are two mutual fund managers. Manager 1eamed 21% in the past year wherean manager 2amed 11% in the past ye The beafthe ttmane 1.8. whereas the beta for ihe second manager is 0.9. Asume CAPM is the comect model Which manager risk-adjusted basis)? (hint compare the actual retum with the expected returm according to CAPM) better stock selector perfomed baer na O Manager 1 O Manager 2 Both performed equally O Not enough information provided

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Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.