A mutual fund manager expects her portfolio to earn a rate of return of 11 % this

Question:

A mutual fund manager expects her portfolio to earn a rate of return of 11 % 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 return on the market portfolio to be 14%, what expected rate of return would you demand before you would be willing to invest in this mutual fund? Is this fund attractive?

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

Question Posted: