By using the capital asset pricing model and assuming that the market yielded an annual compound rate of return of 7.4% over the past five years, has Patricia's stock portfolio, including the mutual fund, outperformed its expected return?

Economic Information

■ They expect inflation to average 3% (consumer price index) annually over both the short and long term.

■ They expect returns of 11% annually on the S&P 500 Index.

■ 90-day T-bills are currently yielding 2%.

■ Current mortgage rates are 4.25% for a fixed 15-year mortgage and 6% for a fixed 30-year mortgage.

■ Mortgage closing costs are expected to be 3% of any mortgage.

The beta is 1.08235821 or 1.0836 rounded