Question
The current 90-day treasury bill rate is 5%, and inflation is 6%. The market risk premium of the JSE All Share Index is 5%, and
The current 90-day treasury bill rate is 5%, and inflation is 6%. The market risk premium of the JSE All Share Index is 5%, and the returns of the AML SA Equity fund 11% and has a beta of 1.5.
Based on the information provided, which of the following statements is CORRECT?
1. A portfolio made up of the 50% of the market portfolio and 50% of the risk-free investment will deliver an expected return of 10%
2.The market return is 10%
3. The AML SA Equity appears to outperform the market
4. Since the treasury bill is a risk-free invetment, there are no invetment risks associated with this invetment.
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