Question
Listed below are the characteristic lines and correlation's (correlation of each fund with the market) for three mutual funds: R 1 =-0.5 + 1.25R m
Listed below are the characteristic lines and correlation's (correlation of each fund with the market) for three mutual funds:
R1=-0.5 + 1.25Rmp=0.8
R2=1.25+0.95Rmp=0.75
R3=0.75+1.35Rmp=0.7
Which fund has the most non-diversifiable risk?
What percent of each fund's risk is systematic and non-systematic?
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Fundamentals of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
6th Canadian edition
1259024962, 978-1259024962
