The Capital Asset Pricing Model (CAPM) predicts that 1.5 pts The return of a risky portfolio is decided by its total risk. Investors tend to invest 100% of their capital into the market portfolio. Investors allocate their capital across the efficient portfolios. The maximum risk that investors are happy to take is the risk of the market portfolio: The expected return of an individual asset is decided by its market risk exposure. Question 8 1.5 pts Which of the following funds typically takes high risk, charges investors both management and incentive (performance) fees, uses exotic investment strategies and is less regulated? 1) a superannuation fund II) an index fund III) an exchange traded fund (ETF) IV) a hedge fund I. II and III III only lill and IV