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Consider the security market line shown below. = 0.06 + 0.04 a) What is the market portfolio rate of return? What is the risk-free rate?

Consider the security market line shown below. = 0.06 + 0.04 a) What is the market portfolio rate of return? What is the risk-free rate? ] b) Assume that over the same period two mutual funds had the following results: Fund A Actual return = 10% Beta = 3 Fund B Actual return = 25% Beta = 4 What can be said about each fund performance?

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